Thông tư 194/2013/TT-BTC

CIRCULAR

GUIDING THE RESTRUCTURING OF WHOLLY STATE-OWNED ENTERPRISES INELIGIBLE FOR EQUITIZATION UNDER THE PROVISIONS OF DECREE NO. 59/2011/ND-CP DATED JULY 18, 2011 BY THE GOVERMENT ON TRANSFORMING WHOLLY STATE-OWNED ENTERPRISES INTO JOINT-STOCK COMPANIES

Pursuant to Decree No. 118/2008/ND-CP dated November 27, 2008 of the Government regulating functions, duties, powers and organizational structure of Ministry of Finance;

Pursuant to Decree No. 59/2011/ND-CP dated July 18, 2011 of the Government on transforming wholly state-owned enterprises into joint-stock companies (hereinafter referred to as Decree No. 59/2011/ND-CP); Decree No. 189/2013/ND-CP dated November 20, 2013 of the Government amending and supplementing a number of articles of Decree No. 59/2011/ND-CP (hereinafter referred to as Decree No. 189/2013 / ND-CP)

At the request of the Head of Department of Entrepreneurial Finance;

Minister of Finance hereby issues the Circular guiding the implementation of restructuring and transformation of those wholly state-owned enterprises ineligible for equitization under the provisions of Decree No. 59/2011/ND-CP dated July 18, 2011 of the Government as follows:

Chapter I-

GENERAL PROVISIONS

Article 1. Scope and objects of application.

1.  Governing scope: This Circular provides guidance on the implementation of the restructuring activities through debt settlement to transform wholly state-owned enterprises into joint stock companies.

2.  This Circular shall be applied to Vietnam Debt Purchase and Sale Company and wholly state-owned enterprises after their financial settlement and business value re-assessment in accordance with Decree No. 59/2011 / ND-CP and 189/2013/ND-CP in which their actual values is lower than their debts payable (hereinafter referred to as restructuring enterprises).

Article 2. Interpretation of terms

In this Circular, the following terms shall be construed as follows:

1. "Restructuring plan" means an approach to the financial settlement and transformation of wholly state-owned enterprises as stipulated at Clause 2, Article 1 of this Circular.

2. "Cost of debt purchase" means the total costs paid for debt purchase by the time of reduction in debt repayment including the actual price of debt purchase plus (+) other legal and reasonable costs related to debt purchase.

3.  “Reduction in debt repayment obligation” means the measures to remove a part of liability for debt repayment from the restructured enterprises, approved by the competent authorities in accordance with law.

4. “Creditor” means organizations or individuals to whom debts are paid.

5. “Creditor’s participation in enterprise restructuring” means those creditors of the restructured enterprises that participate in the restructuring to be transformed into joint-stock companies.

6. Vietnam Debt Purchase and Sale Company is one-member limited liability companies owned by the State converted from the Debt and Asset Trading Company of enterprises (hereinafter referred to as Debt Purchase and Sale Company).

Article 3. Principles for implementing enterprise restructuring through debt settlement for the transformation into joint-stock companies.

1. Those wholly state-owned enterprises carrying out enterprise restructuring for their transformation into joint-stock companies are such enterprises in which the State does not hold 100% charter capital  in accordance with law.

2. Restructuring plan is implemented on the principle of consensus from the competent authorities approving of the plan, restructured enterprises with Debt Purchase and Sale Company or Creditors participating in enterprise restructuring (Parties must enter into a memorandum of understanding ). Debt Purchase and Sale Company has the right to take the initiative in negotiating debt purchase with Creditor and propose the plan for enterprise restructuring as stipulated by laws.

3. Debt Purchase and Sale Company shall be allowed to purchase debts to restructure wholly state-owned enterprises after reaching an agreement with competent authorities in charge of approving the restructuring/equitization plan, and after obtaining the result of negotiation over debt purchase with the Creditors of restructured enterprises. The debt purchase for restructuring of enterprise must ensure its feasibility and possibility of capital recovery with efficiency and sufficient difference between the cost of debt purchase and book value of debt for financial settlement and enterprise restructuring as stipulated by laws.

4. Apart from the content of this Circular, the restructured enterprises, the Debt Purchase and Sale Company and the agencies concerned must comply with the provisions of Decree No. 59/2011/ND-CP Decree No. 189/2013/ND-CP and Circulars of the Ministry of Finance.

Chapter II –

SPECIFIC PROVISIONS

Aticle 4. Procedures for transforming wholly state-owned enterprises into joint-stock companies through restructuring

Procedures for restructuring wholly state-owned enterprises into joint-stock companies are specified in the Appendix to this Circular, including the following basic steps:

1. Implementing plans for transformation of wholly state-owned enterprises into joint stock companies

a) Establishing the Steering Committee for Equitization / Restructuring and assistance Group.

b) Preparing records and documents.

c) Inspecting and settling the finance-related issues and determining the enterprise value under the provisions of Decree No. 59/2011/ND-CP and No.189/2013/ND-CP.

d) Making a decision on requesting the Debt Purchase and Sale Company to participate in the enterprise restructuring.

2. Formulating restructuring plan for submission to the competent authorities for approval.

3. Implementing the restructuring plan.

4. Completing the transformation of wholly state-owned enterprises into joint-stock companies.

a) Organizing the first Shareholders’ Meeting and applying for business registration. 

b) Carrying out the finalization and hand-over between enterprises and joint stock companies.

Article 5. Financial settlement for restructured enterprises.

1.Financial settlement upon determination of enterprise value;

The restructured enterprises carry out financial settlement upon determination of enterprise value under the provisions of  Decree No. 59/2011/ND-CP and No.189/2013/ND-CP and Circular of the Ministry of  Finance.

2. Financial settlement in accordance with the restructuring plan.

2.1 Principles of financial settlement:  

a) Implementing financial settlement for restructured enterprises must be in line with the restructuring plan approved by competent authorities.

b) Ensuring the publicity, transparency and compliance with regulations of law. Where the organizations or individuals concerned, upon their financial settlement, do not comply with regulatory procedures, resulting in losses of capital and assets, these organizations or individuals shall assume their responsibility for any compensations and sanctions as stipulated by laws.

2.2 Content of financial settlement.

a) Reduction in debt repayment obligation for the restructured enterprise:

Based on the restructuring plan approved by competent authorities:

- Debt Purchase and Sale Company is committed to reducing a part of debt repayment obligation for the restructured enterprises. The maximum reduction in debt repayment obligation is equal to a negative number of equity according to the latest financial report (which has been adjusted based on the result of determination of enterprise value) of the restructured enterprise that has been audited by an independent unit, minus (-) the reduction in debt repayment obligation from other creditors (if any) and does not exceed the difference between the book value of debt purchased and the cost of debt purchase by the time the decision on reducing the debt repayment obligation is made.

- Other creditors shall decide to reduce the debt repayment obligation for the restructured enterprises as agreed by the parties.

b) From the time of determining the enterprise value to the time of officially transformed into joint stock company, the restructured enterprise continues to carry out the financial settlement as stipulated by law, particularly:

- The generated profit is used to make up for accumulated losses (if any) and the rest  would be handed over to a joint stock company  for management and usage.

- In case of incurred losses, the restructured enterprise must clarify the reasons and responsibility of the collective and individuals concerned to carry out any possible remedy and compensation as stipulated.

- At the time of being officially transformed into joint-stock company and after offsetting the compensation (if any), the restructured enterprise still suffers the accumulated losses, the Debt Purchase and Sale Company shall co-operate with the creditors participating in the restructuring to consider and continue the reduction in the debt repayment obligation for the restructured enterprise maximally equal to the accumulated number. In this case, the Debt Purchase and Sale Company shall reduce the debt repayment obligations from the remaining difference (between the book value of debt purchased and the cost of debt purchase) after deducting the difference settled under Item a, Point 2.2, Clause 2,  Article 5 of this Circular.

Article 6. Initial sale of shares

1. Restructured enterprise carries out the process, procedure, method of sale and price of initial sale of shares as stipulated in Decree No. 59/2011/ ND-CP and the guiding Circular of the Ministry of Finance. In particular, the price of shares to labors and Trade Union at the restructured enterprise is not lower than the par value of share as stipulated.

2. Debt Purchase and Sale Company and creditors participating in enterprise restructuring are allowed to convert debt into share contributed as capital under principles of agreement and approved by the competent authorities in the restructuring plan;

Article 7. Dealing with unsold shares

Restructured enterprise is responsible for handling the unsold shares under the provisions of Decree No. 59/2011/ND-CP and guiding Circular of Ministry of Finance. Particularly:

1. When further making public offer in the form of agreement for the unsold shares during the auction, the Steering Committee for Equitization or Restructuring shall make a report to the competent agencies having the authority to approve the restructuring/equitization plans to review and make a decision on selling shares to investors attending the auction and other investors as agreed with the price not lower than the lowest successful price at the public auction. Where the auction is not successful (there is no investor registering to participate or only one investor participating or investors participating in the auction but refused to pay for the shares sold in the auction). The Steering Committee for Equitization or Restructuring shall make a report to the competent agencies having the authority to approve the restructuring/equitization plans to review to make a decision on adjusting the starting price, but not lower than the par value to be sold sell to investors as agreed.

2.  Where the share have not sold out, the Steering Committee for Equitization / Restructuring shall review and decide to make an offer to the Debt purchase and Sale Company and the creditors according to the principles specified in Clause 2, Article 6 of this Circular.

3. Where the Debt Purchase and Sale Company and the creditors have not bought all of the shares offered as specified in clause 2, Article 7 of this Circular, the Steering Committee for Equitization / Restructuring shall report to the competent agencies having the authority to approve the restructuring plans to adjust the structure of charter capital to convert the restructured enterprise into the joint stock company prior to the first Shareholders' Meeting.

Article 8. Policies on redundant employees

1. Policies on redundant employees in restructured enterprises shall comply with current regulations of the State of the wholly state-owned capital enterprises upon equitization.

2. Funds:

Funds for settling the policy on redundant employees in restructured enterprises shall comply with the principle: using the capital surplus from the sale of shares (the difference between the proceeds from the sale of shares and the total par value of shares sold) to pay to the redundant employees. Where the capital surplus is not sufficient to pay to the redundant employees, it shall be supplemented from:

- Enterprise development and arrangement support Fund for the restructured enterprises as the parent company of the Economic Group, State Corporations; one member limited liability company whose 100% of charter capital is owned by the State under the management of Ministries, ministerial-level agencies, government agencies and People's Committees of provinces and cities.

- Enterprise support and arrangement Fund at parent company of Economic Group, State Corporation; parent company in consortium parent company - subsidiary for restructured enterprise as subsidiary whose 100% of the charter capital is owned by the parent company. If there is a shortage of charter capital, the enterprise development and arrangement support Fund may be used for supplementation;

Article 9. Costs for transformation of restructured enterprises into a joint stock companies

Costs for transformation of restructured enterprises into a joint stock companies shall comply with the provisions of Decree No. 59/2011/ND-CP and Decree No. 189/2013/ND-CP and the guiding Circular of the Ministry of Finance. In particular, the source of payment for the transformation is the capital surplus from the sale of shares (the difference between the proceeds from the sale of shares and the total par value of shares sold). If there is a shortage of these costs, the Enterprise development and arrangement support Fund may be used for supplementation according to the principles specified in Clause 2, Article 8 of this Circular;

Article 10. Management and use of proceeds from the sale of shares

The management and use of proceeds from the sale of shares of the restructured enterprises shall comply with current regulations for the wholly state-owned capital enterprises having been equitized. Particlularly:

1. All proceeds from the sale of shares after deduction of total  value of the shares sold are used for settlement of policies on the redundant employees and the costs for transformation of enterprise stipulated in Article 8, Article 9 of this Circular. The rest (if any) shall be settled in accordance with current laws.

2. Restructured enterprises does not need to open escrow account during their sale of shares.

3. After being issued with certificate of registration of enterprise transformed into joint stock company, the restructured enterprise is responsible for the settlement of payments for redundant employees and the costs of transformation, making a report to the Steering Committee for Equitization for report to the competent authorities deciding the restructuring for approval while submitting it to the Finance Ministry for supervision.

Chapter III -

IMPLEMENTATION

Article 11. Responsibilities of the Steering Committee for Equitization / Restructuring

The Steering Committee for  Equitization / Restructuring carries out its rights and responsibilities under the provisions of Decree No. 59/2011/ND-CP and Decree No. 189/2013/ND-CP and  relevant guiding documents during the process of  transforming restructured enterprises into joint-stock companies, particularly:

1. Assisting the agencies with competence to approve the equitization/ restructuring plan to direct and carry out the transformation of restructured enterprises into the joint stock companies.

2. Requesting the agencies with competence to approve the equitization/ restructuring plan to supplement members of the Steering Committee after negotiating with the Debt Purchase and Sale Company and creditors on restructuring plan. Additional members consist of representatives of the Debt Purchase and Sale Company and of the creditors involved in the restructuring (if needed).

3. Verifying and reporting to the agencies with competence to approve the equitization/ restructuring plan under the provisions of this Circular.

4. Inspecting and monitoring the implementation of the restructuring plan in accordance with the provisions of this Circular and other relavant guiding documents.

Article 12. Responsibilities of restructured enterprises

1. Being responsible for provision and truthfulness of information and documents to create the conditions for Vietnam Debt Purchase and Sale Company and the creditors participating in the restructuring plan to study and evaluate the actual state of enterprise before formulating the restructuring plan;

2. Coordinating with Debt Purchase and Sale Company and creditors to formulate the restructuring plan and submit it to the competent authorities for approval as stipulated.

Where enterprises with wholly state-owned capital have not conducted their financial settlement and re-determination of enterprise value but according to the last audited financial statements with the total assets of less than the liabilities, the enterprises with wholly state-owned capital shall report to the competent authorities to consider and negotiate with the Debt Purchase and Sale Company to implement the steps of the restructuring process under the provisions of this Circular (if necessary).

3. Implementing the restructuring plan, managing and using the proceeds from the sale of shares under the provisions of this Circular and other relevant guiding documents. In case of incurred losses due to violation and failure to comply with the provisions of this Circular, the restructured enterprises and related individuals shall take responsibility for compensation and handling of responsibilities as stipulated by law.

4.  When completing the process of restructuring, enterprises have to carry out the finalization of funds to support the redundant employees and the costs of transformation, make a report to the Steering Committee for Equitization for submission to the competent authority for approval;

5. Implementing other duties and responsibilities as stipulated in Decree No. 59/2011/ND-CP and Decree No. 189/2013/ND-CP and the relevant guiding documents;

Article 13. Responsibilities of Debt Purchase and Sale Company

1. Negotiating with the competent authorities to approve the restructuring plan and the restructured enterprises before deciding to buy debts from credit institutions and other creditors.

2. Appointing officers to participate in the Steering Committee for Equitization and assistance Group to implement the restructuring plan.

3. Carrying out the financial settlement on restructuring plan approved by competent authorities in accordance with the functions, duties and powers of the Company and regulations of law.

4. Coordinating with enterprises during the implementation of restructuring plan. In case of difficulties arising, the competent authorities must be reported for consideration and settlement.

5. Appointing representatives of the Company's contributed capital at the restructured enterprises as stipulated.

6. Taking responsibility for implementation in accordance with the provisions of this Circular and other relevant guiding documents.

Article 14. Responsibilities of the agencies with competence to approve the equitization/ restructuring plan

The agencies with competence to approve the equitization/ restructuring plan shall exercise their rights and responsibilities under the provisions of Decree No. 59/2011/ND-CP and the relevant guiding documents, including:

1. Directing restructured enterprise  coordinating with Debt Purchase and Sale Company and creditors to conduct surveys and assess the situation of business before participating restructuring.

2. Negotiating with the Debt Purchase and Sale Company and creditors on restructuring plan through debt settlement as stipulated in this Circular.

3. Making a decision on approving the enterprise value and the restructuring plan as stipulated in this Circular and the contents agreed with the Debt Purchase and Sale Company and the creditors participating in the restructuring.

4. Inspecting and supervising the Steering Committee for Equitization / enterprise restructuring on implementation of the restructuring plan.

5. Approving the finalization of funds to support redundant employees, costs for transformation of enterprise and the proceeds from the sale of shares while submitting it to the Ministry of Finance (Department of Entrepreneurial Finance) for supervisions.

Article 15. Responsibilities of the creditors participating in the restructuring

1. Coordinating with enterprises in the process of implementing the restructuring plan. Performing the financial settlement for restructured enterprise under the commitments and restructuring plan approved by competent authorities.

2. Appointing representatives to participate in the Steering Committee for Equitiziation and assistance Group to implement the restructuring plan (if required).

3. Appointing the representatives of contributed capital at the restructured enterprise (if any) as stipulated.

4. Taking responsibility for implementing the provisions of this Circular and other relevant guiding documents .

Article 16. Implementation provisions

1. This Circular takes effect on May 10, 2014. The Competent authority with authority to make a decision on  equitization / restructuring and restructured enterprise and the Debt Purchase and Sale Company are responsible for implementation under the provisions of this Circular and guiding documents of Decree No. 59/2011/ND-CP and Decree No. 189/2013/ND-CP.

2. Restructured enterprises stipulated in Article 1 of this Circular whose restructuring plan has been approved by the competent authorities before the effective date of this Circular shall continue to implement the restructuring plan approved.

3. Any problem arising during the implementation of this Circular should be reported to Ministry of Finance for consideration and settlement. /.