Thông tư 05/2022/TT-BTC

CIRCULAR

INSTRUCTIONS ON RESTRUCTURING OF COMPANIES INELIGIBLE FOR EQUITIZATION AND DISPOSITION OF SHARE BLOCKS AND RECEIVABLES OF WHOLLY STATE-OWNED ENTERPRISES HAVING THE FUNCTIONS OF BUYING, SELLING AND MANAGING DEBTS

Pursuant to the Law on Enterprises No. 59/2020/QH14 dated June 17, 2020;

Pursuant to the Law on Management and Use of State Capital Invested in Production and Business of Enterprises No. 69/2014/QH13 dated November 26, 2014;

Pursuant to the Government's Decree No. 87/2017/ND-CP dated July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015 on investment of state capital, management and use of capital and assets at enterprises;

Pursuant to the Government’s Decree No. 32/2018/ND-CP dated March 8, 2018 on amendments and supplements to several Articles of the Decree No. 91/2015/ND-CP dated October 13, 2015 on investment of state capital in enterprises, management and use of state capital and assets at enterprises;

Pursuant to the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017 on transformation of state enterprises and single-member limited liability companies with 100% of their charter capital wholly held by state enterprises into joint-stock companies;

Pursuant to the Government’s Decree No.140/2020/ND-CP dated November 30, 2020, amending and supplementing several articles of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, regarding transformation of state enterprises and single-member limited liability companies of which 100% of charter capital is held by state enterprises into joint-stock companies; the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, regarding investment of state capital in enterprises and management, use of capital and assets at enterprises and the Government's Decree No. 32/2018/ND-CP dated March 8, 2018, prescribing amendments and supplements to several Articles of the Decree No. 91/2015/ND-CP ;

Pursuant to the Government's Decree No. 129/2020/ND-CP dated October 27, 2020, defining the functions, tasks and operating mode of Debt and Asset Trading Corporation;

Upon the request of the Director of the Corporate Finance Department,

The Minister of Finance herein promulgates the Circular providing instructions on restructuring of companies ineligible for equitization and disposition of blocks of shares and receivables of wholly state-owned enterprises having the functions of buying, selling and managing debts and assets.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular shall provide the following instructions:

1. Restructuring companies ineligible for equitization as per clause 2 of Article 4 in the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, regarding the transformation of state enterprises and single-member limited liability companies of which 100% of charter capital is held by state enterprises into joint-stock companies (hereinafter referred to as Decree No. 126/2017/ND-CP); point b of clause 2 of Article 1 in the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020, prescribing amendments and supplements to  several Articles of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, regarding the transformation of state enterprises and single-member limited liability companies of which 100% of charter capital is held by state enterprises into joint-stock companies; the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, regarding investment of state capital in enterprises and management, use of capital and assets at enterprises and the Government's Decree No. 32/2018/ND-CP dated March 8, 2018, prescribing amendments and supplements to several Articles of the Decree No. 91/2015/ND-CP (hereinafter referred to as Decree No. 140/2020/ND-CP), by means of debt management for transformation into joint-stock companies.

2. Disposing of blocks of shares and receivables of wholly state-owned enterprises having the functions of buying, selling and managing debts and assets as per clause 2 of Article 29a in the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015 on investment of state capital in enterprises, management and use of capital and assets at enterprises (hereinafter referred to as Decree No. 91/2015/ND-CP); point 13 of Article 1 in the Government's Decree No. 32/2018/ND-CP dated March 8, 2018, prescribing amendments and supplements to several Articles of the Decree No. 91/2015/ND-CP (hereinafter referred to as Decree No. 32/2018/ND-CP); clause 16 of Article 2 in the Government’s Decree No. 140/2020/ND-CP and clause 2 of Article 23 in the Government’s Decree No. 129/2020/ND-CP dated October 27, 2020 on the functions, tasks and operating mode of Debt and Asset Trading Corporation (hereinafter referred to as Decree No. 129/2020/ND-CP).

Article 2. Subjects of application  

1. Wholly state-owned enterprises having the functions of trading and managing debts and assets (hereinafter referred to as debt trading enterprises).

2. Enterprises falling into the following situation: After they have been financially treated and re-valued according to the Decree No. 126/2017/ND-CP and the Decree No. 140/2020/ND-CP , their actual corporate value is lower than their payables (hereinafter referred to as restructured enterprises).

3. Ministers; Ministry-level bodies; Governmental agencies; Commission for the Management of State Capital at Enterprises; People’s Committees of provinces and centrally-affiliated cities mandated by the Government to implement rights and responsibilities of representatives of state ownership interests towards enterprises that they decided to set up or are assigned to manage, and implement rights and responsibilities towards portion of state ownership interests in joint-stock companies, multiple-member limited liability companies (hereinafter referred to as owner’s representative agency).  

4. Creditors participating in the restructuring process.

5. Joint stock companies having contributed capital and receivables of debt trading companies.

6. Auction organizations.

7. Investors participating in purchase of blocks of shares and receivables.

8. Other entities and persons involved in transfer of share blocks and receivables.

Article 3. Interpretation

1. “restructuring plan”  refers to a plan of transformation of enterprises subject to regulations of clause 2 of Article 2 herein into joint stock companies, including the financial disposition plan through debt trades.

2. “debt purchase cost” refers to expenses incurred from purchase of a debt, including the purchase cost plus (+) other expenses associated with purchase of that debt.

3. “relief from debt repayment obligations” refers to the method of partial elimination of debt repayment obligations to the debtor as per laws and regulations.

4. “creditor” refers to a credit institution, economic organization, person or other entity performing civil transactions that has the right to claim debts. 

5. “Restructuring creditor” refers to a creditor of a restructured enterprise that jointly participates in the corporate restructuring process for transformation into a joint stock company.

6. “Organization with valuation function” refers to an enterprise established and operating in Vietnam in accordance with law and granted a Certificate of eligibility to provide valuation services under law on pricing and valuation.

7. "Disposal/disposition of a block of shares and receivables" means the simultaneous transfer of a block of shares and receivables of a debt trading company at other enterprise according to the capital transfer methods specified in the Law on Management and Use of State Investments in Production and Business at enterprises (hereinafter referred to as Law No. 69/2014/QH13).

8. “Auction organization” may be a Stock Exchange, securities company, asset auction service center and asset auction company in accordance with law on asset auction.

9. "Unsuccessful competitive auction/offer" includes the following cases:

a) Upon expiry of the registration period, there is no investor registering to participate in the auction/competitive offering, or only 01 investor registering to participate in the auction/competitive offering;

b) After paying the deposit, by the end of the deadline for submission of the registration forms for participation in the auction/competitive offering, there is no investor submitting these registration forms;

c) No bidder bids at the competitive auction/offer, or the highest bid is still below the starting price;

d) All bidders with the same highest bid refuse to either buy or vote by secret ballot;

dd) The bidder makes the winning bid, but refuses to buy;

e) All bidders violate the provisions of the Regulations on auction/competitive offering.

Chapter II

CORPORATE RESTRUCTURING

Article 4. Principles

1. The restructuring plan is implemented on the principle of consensus between the agency representing the owner of the restructured enterprise and the Vietnam Debt and Asset Trading Company (hereinafter referred to as DATC) and/or creditors participating in the restructuring (making a Memorandum of Understanding between the parties). DATC has the right to actively negotiate debt purchase with creditors and propose the corporate restructuring plan in accordance with laws and regulations.

2. DATC decides to buy debts and assets only after reaching agreement with the owner's representative agency and obtaining results of negotiation over debt purchase with the creditors of the restructured enterprises. Debt trading plans for corporate restructuring must ensure feasibility, effective capital recovery and sufficient difference between the cost of debt purchase and the book value of the debt for financial disposition and successfully transformation into a joint stock company according to laws and regulations.

3. If the debt purchase plan for corporate restructuring is not feasible and effective, the Steering Committee on Equitization/Restructuring shall counsel the owner's representative agency to consider deciding another method of transformation according to regulatory provisions.

4. In addition to the regulations laid down in this Circular, restructuring enterprises, DATC and other 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 other supplementary documents (if any).

Article 5. Procedures

The corporate restructuring procedures for transformation into the joint stock company specified in Appendix 1 to this Circular shall comprise the following basic steps:

1. Building restructuring plans

a) Implement the plan for transformation into the joint stock company:

- Establish the Steering Committee on Equitization/Restructuring and the Assistant Team.

- Prepare documents and records.

- Approve the equitization cost estimate, make decision to choose an equitization consultant.

- Carry out the financial inventory, handle financial issues and take charge of corporate valuation according to the provisions of Decree No. 126/2017/ND-CP , Decree No. 140/2020/ND-CP , Circular providing instructions of the Ministry of Finance and written documents stating amendments and supplements (if any).

- Decide and announce corporate value.

- Decide whether the request for participation of DATC and other creditors in the restructuring process is made.

b) Prepare the complete restructuring plan for submission to the owner's representative agency for approval.

2. Implementing the restructuring plan.

3. Finishing transformation into the joint stock company.

a) Hold the first General Meeting of Shareholders and seek enterprise registration;

b) Carry out the final settlement and transfer process involving the restructured enterprise and the joint-stock company.

Article 6. Financial disposition of structured enterprises

1. Financial disposition in the process of corporate valuation

Restructured enterprises shall carry out the financial disposition during the corporate valuation process as per the Decree No. 126/2017/ND-CP , the Decree No. 140/2020/ND-CP and Circular No. 46/2021/TT-BTC dated June 23, 2021 of the Ministry of Finance, providing several instructions about regulations on financial disposition and business valuation during the process of transformation of state enterprises and single-member limited liability companies with 100% of their charter capital wholly held by state enterprises into joint-stock companies (hereinafter referred to as Circular No. 46/2021/TT-BTC) and written documents stating amendments and supplements thereto (if any).

2. Financial disposition according to the restructuring plan 

a) Financial disposition principles:

- The financial disposition at the restructured enterprise must be associated with the restructuring plan approved by the owner's representative agency. Reduction in debt repayment obligations must be attached to the fact that DATC converts debts and assets into contributed capital in the enterprise and does not change the liabilities of organizations or individuals that have caused financial losses before.

- Ensure public disclosure, transparency and compliance with law. In case where relevant organizations and individuals involved in the financial disposition process fail to strictly comply with regulations, thus causing loss of capital and assets, such organizations and individuals shall be responsible for paying compensation and being sanctioned in accordance with laws and regulations.

b) Activities involved in the financial disposition process:

- At the time of business valuation, based on the restructuring plan that the owner's representative agency has approved:

+ DATC considers the deduction for debt repayment obligations which does not exceed the negative difference between equity according to the representative agency’s decision on business valuation and the deduction for the obligations to pay debts of other creditors (if any), and the difference between the book value of the purchased debt and the cost of debt purchase till the time of decision to reduce debt repayment obligations;

+ Other creditors decide to reduce debt repayment obligations for the restructured enterprise as agreed between the parties.

- During the period from the date of business valuation to the date of official transformation into the joint stock company, the restructured enterprise shall continue to take financial disposition actions according to laws and regulations. Including the followings:

+ Generated profits are distributed according to current regulations applied to enterprises in which 100% of charter capital is held by the State.

+ The structured enterprise shall fulfill financial obligations (if any) to the state budget in accordance with current legislation.

+ In case of loss, the agency representing the owner shall direct the restructured enterprise to clarify the causes and responsibilities of the concerned collectives and individuals in order to consider remedial or compensation measures according to regulations. Meanwhile, if there is the surplus produced from the positive difference between the debt purchase cost and the book value of the debt, DATC and the creditors participating in the restructuring process may continue to offset such surplus against part of debt repayment obligations with respect to the remaining loss.

Article 7. Conversion of debts into contributed capital and initial sale of shares

1. DATC and creditors participating in the corporate restructuring process may convert debts/loans into share capital according to the agreement principles and the consent from the owner’s representative agency in the restructuring plan.

2. Restructured enterprises shall follow the order, procedures and use the sale method and the price applied to the initial sale of shares as per the Decree No. 126/2017/ND-CP , the Decree No. 140/2020/ND-CP and the Circular No. 32/2021/TT-BTC dated May 17, 2021 of the Ministry of Finance, providing instructions about initial sale of shares, management and utilization of proceeds from equitization of state enterprises and wholly state-owned enterprises transformed into joint-stock companies (hereinafter referred to as Circular No. 32/2021/TT-BTC) and written documents stating amendments and supplements thereto (if any). The owner’s representative agency shall decide to sell shares to staff members of restructured enterprises at the price which is not lower than 60% of the face value of shares as per clause 3 of Article 42 in the Decree No. 126/2017/ND-CP .

Article 8. Management of unsold shares

Restructured enterprises shall deal with the number of unsold shares in accordance with the Decree No. 126/2017/ND-CP , Decree No. 140/2020/ND-CP and Circular No. 32/2021/TT-BTC. Including the followings:

1. In case of failure to sell all shares to investors by the agreement method after unsuccessful public auction or failure to sell all shares offered for sale at public auctions as prescribed in Clause 3 and Clause 4 of Article 8 in the Circular No. 32/2021/TT-BTC , the Equitization/Restructuring Steering Committee will consider deciding to offer to sell these unsold shares to DATC and creditors on the principle of agreement at the price which is not lower than their par value.

2. In case where DATC and creditors still do not buy all the shares on offer as prescribed in Clause 1 of this Article, the Steering Committee on Equitization/Restructuring shall counsel the owner’s representative agency to adjust the scale and charter capital structure to transform the restructured enterprise into the joint stock company before the first General Meeting of Shareholders to be held.

Article 9. Responsibilities of the Steering Committee on Equitization/Restructuring

The Steering Committee on Equitization/Restructuring shall carry out the rights and responsibilities stipulated in the Decree No. 126/2017/ND-CP , Decree No. 140/2020/ND-CP , Circular No. 32/2021/TT-BTC and Circular No. 46/2021/TT-BTC , including:

1. Help the owner's representative agency or the enterprise with 100% charter capital held by the State (hereinafter referred to as tier-1 enterprise) when the restructured enterprise that is an enterprise of which 100% charter capital is held by the tier-1 enterprise (hereinafter referred to as tier-2 enterprise) directs and undertakes the transformation of the restructured enterprise into the joint stock company.

2. Review and seek consent from the owner's representative agency or tier-1 enterprise (in case the restructured enterprise is a tier-2 enterprise) to the restructuring plan according to the provisions of this Circular.

3. Counsel the owner's representative agency or tier-1 enterprise (in case the restructured enterprise is a tier-2 enterprise) to approve of expenses for conversion, payments for redundant employees, downsizing of payroll and payable proceeds from equitization/restructuring.

4. Inspect and supervise the implementation of the restructuring plan according to the provisions of this Circular and relevant guiding documents.

Article 10. Responsibilities of the owner’s representative agencies or tier-1 enterprises

The owner's representative agency or tier-1 enterprise (in case where the restructured enterprise is a tier-2 enterprise) shall exercise the rights and responsibilities as prescribed in Decree No. 126/2017/ND-CP , Decree No. No. 140/2020/ND-CP , Circular No. 32/2021/TT-BTC and Circular No. 46/2021/TT-BTC , including:

1. Instruct the restructuring enterprise to coordinate with DATC and creditors to conduct an assessment survey on the current situation of the enterprise under consideration before participating in the restructuring.

2. Reach agreement with DATC and creditors on the corporate restructuring plan through the debt and asset disposition or management process according to the provisions of this Circular.

3. Make a decision on consent to the enterprise value and restructuring plan in accordance with the provisions of this Circular and terms and conditions of the agreement with DATC and the creditors participating in the restructuring process.

4. Inspect and supervise the implementation of the restructuring plan by the Steering Committee on Equitization/Restructuring and the restructured enterprise.

Article 11. Responsibilities of restructured enterprises

1. Take responsibility for providing complete and accurate documents and information about their business, enable DATC and creditors participating in the restructuring plan to scrutinize and evaluate the current situation of the structured enterprise before formulating the restructuring plan.

2. Cooperate with DATC and creditors in drawing up the restructuring plan for submission to the owner's representative agency or tier-1 enterprise (in case the restructured enterprise is a tier-2 enterprise) for approval according to regulations.

3. Report to the owner's representative agency or tier 1 enterprise (in case the restructured enterprise is a tier 2 enterprise) for consideration and agreement with DATC to implement the steps in the restructuring process according to the provisions of this Circular if the enterprise has not yet carried out the tasks of financial disposition and business revaluation, but has its total asset which is lower than total payable amount according to the latest audited financial statement.

4. Take charge of carrying out the restructuring plan, manage and use the proceeds from the equitization/restructuring process in accordance with the provisions of this Circular and relevant guiding documents. When any loss occurs due to violation or failure to comply with regulations, the restructured enterprise and related individuals shall be responsible for compensation and sanctions in accordance with the provisions of law.

5. Upon completion of the restructuring process, enterprises shall carry out the final settlement of payments for redundant employees, employees subject to downsizing of payroll and conversion costs, and counsel the Steering Committee on Equitization/Restructuring to request the owner's representative agency or the tier-1 enterprise (where the restructured enterprise is a tier-2 enterprise) to grant approval.

6. Structured enterprises shall carry out the rights and responsibilities towards equitized enterprises under the Decree No. 126/2017/ND-CP , Decree No. 140/2020/ND-CP , Circular No. 32/2021/TT-BTC and Circular No. 46/2021/TT-BTC .

Article 12. Responsibilities of DATC

1. Agree with the owner's representative agency or tier-1 enterprise (in case where the restructured enterprise is a tier-2 enterprise) and the restructured enterprise before deciding to purchase debt from the creditors of the restructured enterprise.

2. Carry out the financial disposition process according to the restructuring plan approved by the owner's representative agency or tier-1 enterprise (in case where the restructured enterprise is a tier-2 enterprise), the functions, responsibilities and authority of DATC, laws and regulations.

3. Cooperate with the restructured enterprise during the process of implementation of the restructuring plan.

4. Nominate the representative of the share of contributed capital from DATC to the structured enterprise according to laws and regulations.

Article 13. Responsibilities of creditors participating in the restructuring process

1. Cooperate with DATC, the owner’s representative agency or tier-1 enterprise (in case the restructured enterprise is a tier-2 enterprise) and the restructured enterprise during the period of implementation of the restructuring plan. Take actions to deal with financial issues arising at the structured enterprises according to restructuring commitments and approved restructuring plans.

2. Join the Steering Committee on Equitization/Restructuring and the Assistant Team in implementing the restructured plan (if required).

3. Nominate the representative of the share of contributed capital at restructured enterprises (if any) according to laws and regulations.

Chapter III

DISPOSAL OF SHARE BLOCKS AND RECEIVABLES

Article 14. Disposition principles and authority to grant disposition decisions

1. The disposal of shares associated with receivables of debt trading companies must comply with the principles specified in Clause 1 of Article 29 of Decree No. 91/2015/ND-CP ; Clause 12 of Article 1 in the Decree No. 32/2018 /ND-CP; Clause 15 of Article 2 in the Decree No. 140/2020/ND-CP and Clause 2 of Article 23 in the Decree No. 129/2020/ND-CP. Those that are not mentioned in this Circular shall be subject to the regulations applied to enterprises of which charter capital is wholly held by the state and other regulations of relevant laws.

2. At the time of formulating the plan to dispose of shares with receivables, in case the expected value is lower than the book value of the debt trading company and the provision for (both contributed capital and receivables) has been made, the decision on the plan to dispose of shares with receivables shall be made as follows:

a) If the provision already made is equal to or greater than the difference between the expected value and the book value, the Board of Members or the company's President shall decide on the plan to dispose of the block of shares and receivables;

b) If the provision already made is less than the difference between the book-value investment and the expected proceeds from disposition, the Board of Members or the company's President must advise the owner's representative agency of the causes of the difference in order for the owner's representative agency to consider any sanction against the organizations and individuals involved in the management of extra-corporate investment capital (if any) and decide on the plan for disposal of blocks of shares with receivables.

3. The entire number of shares offered for sale (all or part of the number of shares contributed in the enterprise) and associated receivables are determined as one block. Investors shall participate in purchase of the full share blocks and receivables. Joint stock companies with contributed capital and receivables of debt trading enterprises are not allowed to participate in auctions, competitive offers, or agreements on the entire share blocks and receivables of their own enterprises. Investors participating in purchase of the full share blocks and receivables are not required to make public bids.

4. Procedures for the disposal of shares associated with receivables of debt trading companies must coincide with those for the extra-corporate disposal of capital as specified in Article 29a of the Decree No. 91/2015/ND-CP ; Clause 123 of Article 1 of the Decree No. 32/2018 /ND-CP; and Clause 16 of Article 2 in the Decree No. 140/2020/ND-CP .

5. The disposal of share blocks with receivables at joint-stock companies registered for trading/listing at Stock Exchanges shall be carried out in the form of public auction (block-based auction). In case where the public auction is unsuccessful, it will be conducted in the form of a competitive offering. In case where there is only one investor who is a participant who has submitted a valid application and completed all procedures to attend the competitive offering session in accordance with the regulations of the competitive offering session, the disposal of share blocks with receivables shall be carried out according to the direct agreement method.

6. For DATC, the disposal or transfer of shares with receivables must comply with the provisions of the Decree No. 129/2020/ND-CP and other documents providing instructions on implementation thereof.

Article 15. Starting prices

1. The Board of Members/the company’s President (or the General Director/Director given authority) of the debt trading company shall decide the starting price for disposal of the block of shares with receivables which is not lower than the value of the block of shares plus the value of the receivable according to the following principles:

a) The value of the block of shares used to determine the starting price of the block of shares with receivables is not lower than the value of a share multiplied (x) by the number of shares offered for sale in block and according to the principles specified at point c of clause 1 of Article 29 in the Decree No. 91/2015/ND-CP ; Clause 12 of Article 1 in the Decree No. 32/2018/ND-CP ; and Clause 15 of Article 2 in the Decree No. 140/2020/ND-CP .

b) The value of receivables used to determine the starting price of a block of shares with receivables must not be lower than the value redetermined during the revaluation process performed by an organization having valuation function. The valuation process shall be subject to laws on valuation and other regulatory provisions.

2. The use of the starting price for disposition of a block of shares with receivables according to the methods stated in this Circular must ensure conformance to the principle that the maximum time is not more than 06 months from the effect date of valuation certificate to the date of announcement of the winning bid for the disposal of shares with receivables (for public auction or competitive offering methods) or to the date of signing the contract for disposal of the block of shares with receivables (for the agreement method). Organizations having the function of valuation may select appropriate valuation methods according to the provisions of the law on prices and valuation to determine the starting price; take responsibility before law for the results of valuation.

Article 16. Conducting auctions

1. Debt trading enterprises shall sign contracts to hire auctioneers to organize the auction of blocks of shares with receivables.

2. In case of establishment of the Auction Council (if any), the auction organization shall issue a decision on the establishment of the Auction Council. The representative of the debt trading enterprise or an authorized person shall be appointed as the Chairman of the Auction Council.

3. Pursuant to the sample Regulation promulgated together with Appendix 2 of this Circular, the auction organization shall issue the Regulations on auctioning the whole block of shares with receivables after reaching agreement with the debt trading enterprise.

Article 17. Preparation of auction dossiers and public announcement

1. Dossier of auction for blocks of shares with receivables, including:

a) The decision of the competent authority approving the plan to dispose of the block of shares with receivables;

b) Documents proving that the debt trading enterprise is the lawful owner of the contributed capital in the joint-stock company;

c) Documents related to the debt: Debt reconciliation datasheet at the time closest to the time of information disclosure, including principal and interest debt (if any); Information on collateral for the debt (if any) and value of the collateral (e.g. book value; revaluated value) and other documents related to the debt (if necessary);

d) Valuation certificate;

dd) A disclosure statement made according to the form prescribed in Appendix II to Decree No. 140/2020/ND-CP , which adds information about the debt sold with the lot of shares, including: value of the debt (book value, re-determined value), information on debt security (if any) and value of collateral assets (book value, revalued value);

e) Regulations on auctioning of the block of shares with receivables.

2. Public disclosure:

Public disclosure of information shall be subject to the provisions of clause 3 of Article 29a in the Decree No. 91/2015/ND-CP , clause 13 of Article 1 in the Decree No. 32/2018/ND-CP and clause 16 of Article 2 in the Decree No. 140/2020/ND-CP .

Article 18. Auctioning

1. The auction is held at the headquarter of the auction organization, debt trading enterprise or other location as agreed between the debt trading enterprise and the auction organization.

2. Within the time limit specified in the Auction Regulations, bidders eligible to participate in the auction shall register for the auction and pay a deposit. The debt trading enterprise shall decide the bidder's deposit rate equal to 10% of the total value of the block of shares with receivables calculated at the starting price. In case where it is necessary to determine a higher deposit to ensure the successful implementation of the disposal plan, the debt trading enterprise shall decide on the deposit rate which is not higher than 20% of the total value of the block of shares with receivables calculated at the starting price.

After registering for the auction and completing the deposit procedure, the investor shall be provided with an auction participation slip by the auction organization to place a bid.

3. Within the time limit specified in the Auction Regulations, investors write the bid on the auction attendance slip and vote directly at the auction venue or vote by post according to the Regulations on the auction of shares. Each investor may be granted only one slip to participate in the auction and can only put in one bid for the entire block of shares with receivables.

The public auction shall be conducted only when at least 02 investors who are the participants have submitted valid dossiers and have completed all the procedures for participating in the public auction as prescribed in the Regulations on auction.

Article 19. Determination of auction results

1. The valid auction price must be the one that is not lower than the starting price as prescribed in the Auction Regulations.

2. The winning bid shall be determined to be the valid price at which the bidder has placed the highest bid.

3. In case where two or more investors put in the same highest bid which is not lower than the starting price. Within 05 working days from the date of holding the auction of shares with receivables, debt trading enterprises shall coordinate with auction organizations to conduct direct secret ballots among investors submitting these bids to determine the investor with the highest and only bid. The secret ballot price is the price not lower than the same highest bids that investors have submitted according to the bid increments specified in the Auction Regulations. The investor with the highest bid determined after voting by secret ballot becomes the winning bidder and is entitled to buy a block of shares with receivables. If investors continue to submit the same bid when holding secret ballots, a ballot will be held immediately to determine the winning bidder.

In case where the bidder submitting the highest bid equally refuses to vote by secret ballot, or the bidder who has determined the winning bid refuses to buy, the auction shall be determined to be unsuccessful in order to switch to another method of disposal according to the regulatory provisions.

Article 20. Handling of auction results

1. Immediately after the end of the auction, based on the auction results, the auction organization shall make a record of the auction results; Auction organizations, debt trading enterprises shall co-sign the record of determination of auction results. The record of determination of auction results shall be made by using the form given in Appendix III to the Decree No. 140/2020/ND-CP .

2. Within a maximum period of 05 (five) working days from the auction end date, debt trading enterprises/auction organizations shall jointly announce the auction results at the auction location, on the websites of the auction organizations, debt trading enterprises, and notify the auction winning bidders.

3. Within a maximum of 07 (seven) days from the date of announcement of the results of the auction of shares, based on the notice of auction winning, the investor shall pay the remainder of the purchase price of the shares with receivables according to the winning bid after deducting the deposit amount. Within this time limit, the debt trading enterprise shall coordinate with the auction organization to return the deposit to the investors who do not win the auction and do not violate the Auction Regulations. Investors who violate the Auction Regulations will not be refunded the deposit.

4. Transferring proceeds from selling blocks of shares with receivables and list of investors who have paid money to debt trading enterprises

a) Within 05 (five) working days from the deadline for investor's payment, the auction organization shall be responsible for transferring the proceeds from the sale of the block of shares with receivables and the list of investors who have paid to debt trading enterprises.

b) Within 10 (ten) working days from the deadline for paying investors' money, the debt trading enterprise shall send a dossier including: The competent authority's decision on approval of the plan to transfer the block of shares with receivables, the written request and the written document stating the investor wins the auction of the block of shares with the receivables (including the list of investors who have paid) to the Vietnam Securities Depository in the case of an auction of shares in a joint-stock company that has registered its shares at the Vietnam Securities Depository.

c) Within 5 days from the date of receipt of the dossier from the debt trading enterprise, the Vietnam Securities Depository shall be responsible for transferring the ownership of the capital portion transferred by the debt trading enterprise to another organization or individual according to the dossier submitted by the debt trading enterprise to the Vietnam Securities Depository.

In case where a debt trading enterprise auctions shares that have not yet been registered at the Vietnam Securities Depository, the procedure for transferring share ownership between the debt trading enterprise and the investor after the investor complete payment of share purchase shall be subject to the provisions of the Law on Enterprises, and the charter of the joint-stock company.

d) Debt trading enterprises shall be responsible for coordinating with joint-stock companies to complete the procedures for exclusive ownership of shares with receivables for investors, and publicizing information on the specific procedures and time for completing the transfer of ownership of shares with receivables to investors when the auction is held.

5. Based on the debt value and the value of the block of shares when determining the starting price as prescribed in Article 15 of this Circular, the debt trading enterprise shall decide on the allocation of proceeds from the auction of the block of shares and receivables for the block of shares and debt according to the principle that the amount allocated is not lower than the value of the block of shares and the debt when determining the starting price of the block of shares with receivables.

6. In case where the auction of shares with receivables is unsuccessful, the Members' Council or the company’s President of the debt trading enterprise shall decide to switch to competitive offering.

Article 21. Competitive or agreement-based offering

1. The implementation, determination of results, payment of proceeds from the sale of shares, preparation and sending of dossiers of transfer of share ownership and report on transfer of share blocks with receivables by competitive offering method shall be subject to the regulations as applied to the public auction method prescribed in Article 16, Article 17, Article 18, Article 19 and Article 20 of this Circular.

2. In case where the competitive offering of a block of shares with receivables is attended by only 01 (one) participating bidder, the debt trading enterprise shall sell the direct agreement to the investor who has submitted the valid application and fully comply with the procedures for participation in the competitive offering session as prescribed at a price not lower than the starting price of the competitive offering session.

3. After carrying out the methods of public auction, competitive offering and agreement, if the block of shares with receivables cannot be disposed of, the debt trading enterprise shall, based on market demands, choose the time of continuation in disposal of the block of shares with receivables according to the transactional methods and the order of implementation of the methods according to the provisions of this Circular.

Article 22. Responsibilities of debt trading enterprises

1. Take responsibility for the transfer of shares with receivables in accordance with the provisions of this Circular.

2. Prepare dossiers and disclose information on transfer of share blocks with receivables according to the provisions of Article 17 of this Circular.

3. Sign the record of determination of the results of the auction/competitive offering and announce the results of the competitive auction/offering according to the provisions of Clause 1 and 2, Article 20 and Article 21 of this Circular.

Article 23. Responsibilities of auction organizations

1. Decide on the establishment of the auction/competitive offering council (if any) and issue the Regulations on auction/competitive offering of shares with receivables.

2. Cooperate with debt trading enterprises to disclose information and report on results of auction/competitive offering of shares with receivables in accordance with this Circular.

3. Carry out the disposal of share blocks and receivables in compliance with regulations of this Circular and other relevant laws.

Article 24. Responsibilities of joint stock companies having contributed capital and receivables of debt trading companies

1. Cooperate on providing necessary information in order for debt trading enterprises to prepare auction/competitive offering dossiers for share blocks and receivables in accordance with regulations.

2. Cooperate with debt trading enterprises/auction organizations in transferring ownership of contributed capital and the right of the creditor of receivables to the bidder winning the bid for the share block and receivables.

Article 25. Responsibilities of investors

1. Investors participating in the purchase of shares shall be responsible for strictly complying with the provisions of the Regulation on transfer of shares with receivables and this Circular.

2. In case where the investor receives a transfer of shares with receivables from a public company and becomes a major shareholder, the investor shall comply with the information disclosure regime in accordance with the law on securities.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 26. Grandfather clause

1. Restructured enterprises obtaining approval of the restructuring plan from the owner's representative agency before the effective date of the Decree No. 126/2017/ND-CP shall continue to comply with the approved restructuring plan.  The financial disposition, management and settlement of proceeds from equitization/restructuring at the time the enterprise is officially transformed into a joint stock company shall comply with the provisions of Decree No. 126/2017/ND-CP , Decree No. 140/2020/ ND-CP, Circular No. 32/2021/TT-BTC , Circular No. 46/2021/TT-BTC and instructions given in this Circular.

2. With respect to the plan on transferring share blocks with receivables that has been approved, if the transfer has not been completed till the effective date of this Circular, the approved plan shall continue to take effect. In case of adjusting the plan for transferring shares with receivables after the effective date of this Circular, the debt trading enterprise shall consult the provisions of this Circular and relevant laws to decide on the transfer option.

3. After the Vietnam Securities Depository and Clearing Corporation officially operates in accordance with the provisions of the Securities Law No. 54/2019/QH14, the regulations applicable to the Vietnam Securities Depository Center shall be then applicable to Vietnam Securities Depository and Clearing Corporation.

Article 27. Entry into force

1. This Circular shall enter into force as from April 1, 2022.

2. This Circular shall replace the following documents:

a) Circular No. 69/2018/TT-BTC dated August 8, 2018 of the Ministry of Finance, guiding the restructuring of state-owned enterprises that are not eligible for equitization according to the provisions of Decree No. 126/2017/ND -CP dated November 16, 2017 of the Government on transformation of state-owned enterprises and single-member limited liability companies with 100% charter capital invested by state-owned enterprises into joint-stock companies;

b) Circular No. 50/2019/TT-BTC dated August 8, 2019 of the Ministry of Finance guiding the auction of block of shares with receivables of state-owned enterprises with the function of buying, selling and handling debts.

3. In the course of implementation hereof, if there is any difficulty that may arise, the Ministry of Finance should be informed to seek possible actions to deal with debts.