05 principles for amalgamation and merger of investment companies in Vietnam

05 principles for amalgamation and merger of investment companies in Vietnam (Internet image)

Article 28 of Circular 227/2012/TT-BTC stipulates that an investment company shall be amalgamated or merged with other investment companies in Vietnam when:

• The amalgamation or merger has been approved by General meeting of shareholders;

• The amalgamation or merger plan, and the amalgamation or merger contract have been approved by General meeting of shareholders. The amalgamation or merger plan, the amalgamation or merger contract must comply with the templates in Annex 09 and 10 enclosed with Circular 227/2012/TT-BTC.

• When swapping stocks together with pay cash, the shareholders of the transferor company shall receive an amount which does not exceed 10% of the net asset value per share on the amalgamation or merger day;

• The shareholders that protest against the amalgamation or merger may request the transferor company to repurchase their shares at a price agreed by both parties based on the net asset value per share on the repurchase date. Creditors may request the debt repayment  before the amalgamation or merger. The order and procedure for requesting the share repurchase or debt repayment must comply with the laws on enterprises;

• The transferee company must satisfy the conditions in Clause 1 Article 20 of Circular 227/2012/TT-BTC.

Note: Within 60 days from the date on which the General assembly of shareholders of last the investment company approves the amalgamation or merger, the transferee company shall send the State Securities Commission an application for the issue or the adjustment of the License for establishment and operation.

More details can be found in Circular 227/2012/TT-BTC, which comes into force from July 1, 2013.

Le Vy

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