Authority to Approve and Consent to Plans for Issuing Bonds to the International Market in Vietnam

Authority to Approve and Consent to Plans for Issuing Bonds to the International Market in Vietnam​ (Image from the Internet)

1. Conditions for Offering Bonds to the International Market in Vietnam

According to the provisions of Article 25 Decree 153/2020/ND-CP, the conditions for offering bonds to the international market are as follows:

- For non-convertible bonds without warrants:

+ The issuing enterprise is a joint-stock company or a limited liability company established and operating under the laws of Vietnam;

+ The plan to issue bonds to the international market is approved and accepted by the competent authority as prescribed in Article 28 Decree 153/2020/ND-CP;

+ Meet financial safety ratios, and safety assurance ratios in activities as prescribed by specialized laws;

+ Comply with regulations on the management of borrowing, and repaying foreign debts of enterprises not guaranteed by the Government of Vietnam and foreign exchange management laws;

+ Conditions for offering as stipulated in the issuing market.

- For convertible bonds or bonds with warrants:

+ The issuing enterprise is a joint-stock company that meets the issuance conditions specified in Clause 1, Article 25 Decree 153/2020/ND-CP;

+ The conversion of bonds into shares, and execution of rights associated with the warrants must meet the ownership ratio regulations for foreign investors as stipulated by law;

+ Issuing intervals for convertible bonds, and bonds with warrants must be at least 06 months from the completion date of the nearest offering.

2. Authority to Approve and Consent to Plans for Issuing Bonds to the International Market in Vietnam

The authority to approve and consent to the plan to issue bonds to the international market is specifically provided in Article 28 Decree 153/2020/ND-CP as follows:

- For joint-stock companies:

+ For the offering of convertible bonds, and bonds with warrants, the issuance plan must be approved by the General Meeting of Shareholders. Votes to pass the Resolution approving the bond issuance plan are conducted according to the provisions of the Enterprises Law 2020.

+ For the offering of non-convertible bonds without warrants, the authority to approve the bond issuance plan is implemented according to the company's Charter. If the Company's Charter does not stipulate differently, the Board of Directors has the authority to approve the bond issuance plan, but it must report to the General Meeting of Shareholders at the nearest meeting, accompanied by the bond-offering documents and records.

- For limited liability companies, the authority to approve the bond issuance plan is the Members' Council or the Chairman of the company or the company owner under the company's Charter.

- For state enterprises, in addition to the authority to approve as stipulated in Clauses 1 and 2 of Article 28 Decree 153/2020/ND-CP, compliance with capital mobilization regulations in the international market under the law on the management and use of state investment in production and business in enterprises and enterprise law is required.

- For enterprises operating in conditional business lines, in addition to the authority to approve the bond issuance plan as specified in Clauses 1, 2, and 3 of Article 28 Decree 153/2020/ND-CP, the authority to accept the bond issuance plan must comply with specialized law regulations.

3. Principles for Offering Bonds to the International Market in Vietnam

According to Article 25 Decree 153/2020/ND-CP, the principles for offering bonds to the international market include:

- Enterprises offering bonds to the international market (either privately or publicly) must comply with the provisions of Decree 153/2020/ND-CP and meet the conditions for offering as specified in the issuing market.

- The trading of corporate bonds offered to the international market is conducted according to the regulations of the issuing market.

Vo Tan Dai

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