Regulations on private placement of shares and private placement of bonds in Vietnam

Regulations on private placement of shares in Vietnam

Pursuant to Article 125 of the Law on Enterprises 2020, regulations on private placement of shares of a joint stock company are as follows:

- The private placement of shares of a non-public joint stock company shall satisfy the following conditions:

+ The offering is not made through mass media;

+ Shares are offered to fewer than 100 investors, not including professional securities investors or only offered to professional securities investors.

- The private placement of shares of a non-public joint stock company shall be carried out as follows:

+ The company shall issue a decision on private placement of shares in accordance with the Law on Enterprises 2020;

+ The company’s shareholders exercise their rights to buy shares as follows, except consolidation and acquisition of companies;

++ The company shall send a written notification by express mail to the shareholders’ mailing addresses written in the shareholder register at least 15 days before the deadline for subscribing for shares;

++ The notification shall contain the full name, signature, mailing address, nationality and legal document number if the shareholder is an individual; names, EID numbers or legal document number and headquarters address if the shareholder is an organization; the shareholder’s current shares and holding; the total quantity of shares offered and the number of shareholders having the right to buy them; the offered price; deadline for subscribing; full name and signature of the company’s legal representative. The notification shall be enclosed with the share subscription form issued by the company. If the share subscription form is not sent to the company by the deadline, it will be considered that the shareholder has renounced the right to buy shares;

++ Shareholders may transfer their right to buy shares to other persons.

+ In case the shares are not completely bought by the shareholders and the persons that receive the rights to buy shares, the remaining number of shares shall be offered by private placement under conditions that are not more favorable than those offered to the shareholders, unless otherwise accepted by the GMS.

- Foreign investors that buy shares offered in accordance with this Article shall complete the procedures for purchasing shares specified in the Law on Investment.

Regulations on private placement of shares and private placement of bonds in Vietnam (Internet image)

Regulations on private placement of bonds in Vietnam

Pursuant to Article 128 of the Law on Enterprises 2020, regulations on private placement of bonds of joint stock companies are as follows:

- The joint stock company that is not a public company may make sell bonds using private placement in accordance with this Law and relevant laws. Private placement of bonds by public companies and other organizations, and public offering of bonds shall comply with securities laws.

- Private placement of bonds by a joint stock company that is not a public company means the offering of bonds without mass media to fewer than 100 investors, excluding professional securities investors, that satisfy the following conditions:

+ Strategic investors for privately placed convertible bonds and bonds attached to warrants;

+ Professional securities investors for privately placed convertible bonds, warrant-linked bonds and other kinds of privately placed bonds.

- A joint stock company that is not a public company must satisfy the following conditions to make private placement of bonds:

+ The company’s has fully paid the principal and interest of the bonds that are offered and due or fully paid due debts over the last 03 years before the offering (if any), except offering of bonds to creditors that are pre-selected finance organizations;

+ The company has the audited financial statement of the year preceding the year of offering;

+ The liquidity ratios and prudential ratios are maintained;

+ Other conditions prescribed by relevant laws.

Mai Thanh Loi

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