From April 1, 2022, Circular 05/2022/TT-BTC of the Ministry of Finance officially takes effect (“Circular 05”), the content of Circular 05 is the guidance: (1) Restructuring enterprises that are not eligible for equitization and; (2) Transferring lots of shares with receivables of enterprises in which 100% charter capital is held by the State and has the function of buying, selling and handling debts issued by the Minister of Finance.
According to Circular 05, the restructuring of enterprises must ensure the following 04 principles:
– First: The restructuring plan is implemented on the principle of consensus between the agency representing the owner of the restructured enterprise and the Vietnam debt trading one-member limited liability company (hereinafter referred to as Vietnam Debt Trading Company) and/or creditors participating in the restructuring (making minutes of agreement between the parties). Vietnam Debt Trading Company has the right to actively negotiate debt purchase with creditors and propose a plan to restructure the enterprise in accordance with the provisions of law.
– Second: Vietnam Debt Trading Company only decides to buy debt after reaching an agreement with the owner’s representative agency and negotiating results on debt purchase with the creditors of the restructured enterprise. Debt purchase and sale plans for enterprise restructuring must ensure feasibility, effective capital recovery, and sufficient sources of difference between the cost of debt purchase and the book value of the debt for financial handling, successfully converting the enterprise into a joint-stock company according to regulations.
– Third: If the debt purchase plan for corporate restructuring is not feasible and effective, the Equitization/Restructuring Steering Committee shall report to the owner’s representative agency for consideration and decision on the form of transfer according to the provisions of law.
– Fourth: In addition to the contents specified in Circular 05, restructuring enterprises, Vietnam Debt Trading Company, and relevant agencies shall comply with the provisions of Decree No. 126/2017/ND-CP, Decree No. 140/2020/ND-CP, Decree No. 129/2020/ND-CP, and amendments and supplements (if any).
Circular 05 takes effect from April 1, 2022. Replace Circular 69/2018/TT-BTC and Circular 50/2019/TT-BTC.
* This newsletter is only for informational purposes about newly issued legal regulations, not used to advise or apply to specific cases.
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