The Prime Minister has promulgated Decree 109 on shifting 100% state owned enterprises into joint stock companies, which will replace Decree 187 dated November 16, 2004 on the same issue.
Under the new decree, the entities to be equitised are expanded, and include state owned independent companies, holding companies in economic groups, state owned general corporations, holding companies in parent-and-son companies, independent companies belonging to state owned general corporations, dependent units of state owned independent companies, economic groups, state owned general corporations, and state owned limited companies in which the state holds 100% of chartered capital.
Enterprises to be equitised will not include enterprises in which the state must hold 100% of capital.
Moreover, the enterprises will retain state capital after financial restructuring and corporate re-assessment.
The decree also stipulates the various methods of the initial selling of stakes, including: 1. auctioning 2. guaranteeing for issuance 3. making direct deals. The agency which releases the decision on equitisation will consider the situation to determine the methods of stake sales to be applied.
Regarding capital ownership ratio after the initial public offering, the decree says that the ratio of shares to be sold to strategic and other shareholders must not be lower than 25% of chartered capital. Competent agencies will determine the capital ownership ratios in special cases, when enterprises have the state owned capital of more than VND500bil, and operate in special fields.
The stake ratio to be sold to trade unions in enterprises must not be higher than 3% of chartered capital. Staffs in equitising companies will be allowed to buy 100 shares at maximum for every year of service in the companies.
The state owned enterprises which got approval for their equitisation plans before the day the new decree becomes effective will be equitised in accordance with the approved plan. The equitisation of the state owned commercial banks will be undertaken in accordance with the new decree.
Source: VNE
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