Conditions for public offering of shares by shareholders of public companies in Vietnam

Conditions for public offering of shares by shareholders of public companies in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Conditions for public offering of shares by shareholders of public companies in Vietnam

Specifically, in Article 13 of Decree 155/2020/ND-CP, conditions for public offering of shares by shareholders of public companiesy are as follows:

- The offered shares satisfy the conditions specified in Point a Clause 1, Point b Clause 2 Article 15 of the Law on Securities 2019.

Article 15. Requirements for public offering

1. A joint-stock company (the issuer) shall satisfy the following requirements to offer its shares publicly:

a) The contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;

...

2. In order to make follow-on offering, a public company (the issuer) shall satisfy the following requirements:

...

b) The company has profit in the preceding year and has no accumulated loss on the offering date;

- If the offering shareholder is an organization, the offering plan must be approved by the supervisory authority of that organization in accordance with the Law on Enterprises and its charter.

- The offered shares are under the ownership of the offering shareholders and are freely transferrable.

- There is a securities company that provides IPO advisory services, unless the offering shareholder is a securities company.

- The offering shareholder must open an escrow account to receive payment for the offered shares.

- The foreign ownership ratio in the public company whose shares are offered is conformable.

- SBV and the Ministry of Finance have approved the transfer of shares of the credit institution or insurer by the shareholder if such an approval is mandatory as prescribed by regulations of law on credit institutions and insurance business.

2. Application for public offering of shares by shareholders of public companies in Vietnam

Application for public offering of shares by shareholders of public companies includes:

- The application form No. 06 in the Appendix of Decree 155/2020/ND-CP.

- The prospectus prescribed in Article 19 of the Law on Securities.

- The decision to approve the offering plan issued by the competent authority of the offering shareholder that is an organization which specify the types of offered shares; quantity of shares offered; the offer price, rules for determination thereof or authority to determine the offer price.

- The shareholder register or a certificate issued by VSDCC or depository member, or the share certificate.

- The financial statements of the last 02 years of the organization whose shares are offered as prescribed by Article 20 of the Law on Securities. In case the application is completed by the offering shareholder after 90 days from the end of the fiscal year, the latest audited annual financial statement of the organization whose shares are offered must be included.

- There is a securities company that provides IPO advisory services, unless the offering shareholder is a securities company.

- Written confirmation by the bank or FBB that the offering shareholder has opened an escrow account to receive payment for the offered shares.

- A decision of the superior authority of the offering shareholder that is an organization to approve the plan for assuring conformable foreign ownership ratio in the public company whose shares are offered is conformable.

- The written approval of SBV or the Ministry of Finance for transfer of shares by the shareholder (if any).

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE