Vietnam: Forms of initial offering of shares in state-owned enterprises

21:16, 30/09/2018

Recently, the Ministry of Finance of Vietnam issued Circular No. 40/2018/TT-BTC, which provides guidelines for initial share offering and management and use of proceeds from the equitization of state-owned enterprises and single-member limited liability companies with 100% charter capital invested by state-owned enterprises.

According to Circular No. 40/2018/TT-BTC of the Ministry of Finance of Vietnam, an initial offering of shares shall be conducted in the following forms:

1. Public auction shall be applied for initial offering of shares including the number of shares offered to investors but failed to be sold according to the equitization plan.

2. Direct negotiation will be applied in the following cases:

- Selling to strategic investors in the following cases:

+ Strategic investors subscribe for shares with the purchasing number smaller than number of shares expected to be sold according to the approved equitization plan.

+ Only one strategic investor subscribes for shares.

- Selling to the investors the number of unsold shares as prescribed in clause 2 and 4 in Article 37 of Decree No. 126/2017/ND-CP of Vietnam’s Government.

- Selling to employees and trade unions.

3. Issuance underwriting shall be applied when selling the initially issued shares of the equitized enterprise.

4. Book-building shall comply with the special guidance of the Ministry of Finance.

More details can be found in Circular No. 40/2018/TT-BTC of the Ministry of Finance of Vietnam, which takes effect from June 18, 2018.

- Thanh Lam -

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