This content is detailed in Decree 06/2015/ND-CP issued by the Government of Vietnam on January 13, 2015, regarding the financial management regulations of the Parent Company - Vietnam Oil and Gas Group.
According to Decree 06/2015/ND-CP regulations, the Parent Company - Vietnam National Oil and Gas Group is authorized to raise capital to serve its production and business activities and investments in the following forms:
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- Issuing bonds;
- Borrowing from credit institutions and other financial organizations, from individuals, and organizations outside the enterprise;
- Borrowing from employees and other forms of capital mobilization according to the law.
The capital-raising activities are implemented according to the provisions of this Circular. To be specific:
- The raising of capital for business must be conducted on the principle of self-responsibility for repayment, ensuring effective use of mobilized capital, and not altering the ownership form of the Parent Company.
- For raising capital from domestic economic organizations and individuals, the parent company must execute borrowing contracts with the lending economic organizations and individuals in accordance with the law; the domestic borrowing interest rate must not exceed the loan interest rate for the same term by the commercial bank where the parent company has a transaction account at the borrowing time; in the case that the parent company has transaction accounts in multiple banks, the maximum direct capital-raising interest rate must not exceed the highest loan interest rate for the same term by any of the banks where the parent company has a transaction account.
- Raising capital from foreign individuals and organizations shall comply with the Government of Vietnam's regulations on external debt management. For foreign borrowing under the self-borrowing and self-repayment method, the Ministry of Industry and Trade must approve the parent company's foreign debt-raising plan and submit it to the Ministry of Finance for review and approval.
- Raising capital in the form of bond issuance for serving the main business sectors shall comply with the legal provisions on corporate bond issuance prescribed in the Law on Enterprises and related documents on corporate bond issuance.
Regarding the authority to approve loan contracts:
- The Parent Company's Board of Members decides on loan contracts valued up to under 30% of the charter capital in accordance with legal provisions and must ensure that the debt-to-equity ratio does not exceed 3 times, including loan guarantees for companies with which the Parent Company has capital contributions.
- In cases where the Parent Company's total capital-raising needs exceed the stated limit, the Parent Company's Board of Members must report to the Ministry of Industry and Trade for consideration and prior approval before making a decision.
The Parent Company is allowed to guarantee loans for its wholly-owned subsidiaries or companies with the Parent Company's equity participating when borrowing from credit institutions as per the legal provisions.
More details can be found in: Decree 06/2015/ND-CP effective from March 1, 2015.
Thu Ba
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