Latest regulations on procedures for private placement in Vietnam

Latest regulations on procedures for private placement in Vietnam (Internet image) 

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

1. Latest regulations on procedures for private placement in Vietnam

Procedures for private stock offering according to Article 48 of Decree 155/2020/ND-CP are as follows:

- The issuer shall send the application for private placement to SSC.

- Within 07 working days from the receipt of the satisfactory report, SSC shall issue a written approval and announce the receipt of the application on its website. In case the application is rejected, SSC shall make a written response and provide explanation.

- The issuer shall complete the private placement within 90 days from the day on which SSC issues the written approval.

- Within 10 days from the end of the offering, the issuer shall send the report on the revenue generated by the offering enclosed with confirmation of the bank or FBB where the escrow account is opened to SSC in accordance with SSC and disclose this information on the websites of the issuer and SSC.

- Within 03 days from the receipt of the satisfactory report, SSC shall send a written notification of the receipt of the report to the issuer, the Stock Exchange and VSDCC, and announce the receipt of it on the website of SSC.

- After receiving the notification from SSC, the issuer may request unfreezing of the amount obtained from the offering.

- The interval between the private placements shall be at least 06 months from the ending date the private placement, including private placement of shares, convertible bonds, warrant-linked bonds, warrant-linked preference shares; issuance of shares for swap to shareholders of non-public joint stock companies, swapping stakes of contributing members of limited liability companies; issuance shares for swap to pre-selected shareholders in public companies; issuance of shares for swapping debts.

2. Conditions for issuance of new shares as the basis for overseas offering of depositary receipts in Vietnam

Conditions for issuance of new shares as the basis for overseas offering of depositary receipts (DRs) according to Article 73 of Decree 155/2020/ND-CP are as follows:

- The issuer having shares as the basis for overseas offering of DRs (“underlying shares”) is an organization whose shares are listed on the securities market of Vietnam.

- The issuer makes a profit in the year preceding the issuance year and does not have accumulated loss by the issuance year.

- There is a plan for issuance of new underlying shares and a plan for use of revenue obtained from the issuance which is approved by the GMS.

- The issuance of shares satisfies regulations of law on foreign ownership ratio.

- There is a securities company that provides counseling on preparation of the application for issuance of shares for swap, unless the underlying share issuer is a securities company.

- The underlying share issuer has opened an escrow account to receive payment for the shares at a permitted bank or FBB as prescribed by regulations of law on foreign exchange management.

- If the issuance is meant to raise capital for execution of the issuer’s project, the quantity of sold shares must be at least 70% of the shares issued for project execution. The issuer shall have a plan to make up for the deficiency of capital generated by the offering.

- There is commitment to list the shares on the securities trading system at the end of the issuance.

- There is a scheme for overseas issuance of DRs which is approved by the GMS or the Board of Directors (if authorized by the GMS) in accordance with regulations of law of the host country.

- There is a contract for assistance in issuance of DRs the underlying share issuer and the overseas DR issuer.

- There is a depositary contract between the overseas DR issuer and a depository member of VSDCC.

- The conditions for follow-on offering specified in Points a, e Clause 1 and Point c Clause 2 Article 15 of the Law on Securities 2019 are satisfied.

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