Minimum Content When Selling Shares for the First Time via Book Building Method

02:47, 11/07/2024

On April 11, 2019, the Ministry of Finance issued Circular 21/2019/TT-BTC providing guidelines on the initial share sale and the transfer of state capital through the book building method.

Plan for the initial public offering (IPO) using book building method is a part of the equitization plan according to the provisions of Decree 126/2017/ND-CP, and must minimally include the following contents:

- Number of shares offered for sale using the book building method;- The book building price range is constructed to reflect market demand for shares being offered and serves as the basis for determining the opening price, the book building price range shall not exceed 20% from the starting price;- Structure of shares sold to investors using the book building method: the ratio of shares sold to public investors, the ratio of shares sold to strategic investors;- Percentage (% of charter capital) and maximum number of shares sold to foreign investors;- Principles for prioritizing price determination for distribution;- Conditions to initiate book building;- Plan for handling in case of order cancellation;- Underwriting contents;- Organization for managing order book.

See the full text of regulations in Circular 21/2019/TT-BTC effective from June 3, 2019.

- Thanh Lam -

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