The foreign borrowing limits applicable to the Government and companies in Vietnam have just been issued last week under Decision 477 of the Prime Minister. Based on these limits, the State Bank of Vietnam will give its approval for foreign borrowing including offshore bond issuance by companies in Vietnam during 2014. Under Decision 477, for the year 2014:
- commercial borrowing by companies which are guaranteed by the Government is capped at US$ 2.8 billion;
- commercial borrowing by companies which are not guaranteed by the Government is capped at US$ 3.8 billion. However, this limit may be increased during the third quarter, if necessary;
- the Government may issue an international bond but the amount is not mentioned; and
- various ministries including the Ministry of Planning and Investment, the Ministry of Industry and Trade are instructed to evaluate its guarantee exposures in various BOT or large infrastructure projects. It is not clear if this instruction means that the Government now considers its obligations under various Government Guarantee and Undertakings for large scale infrastructure projects equivalent to its guaranteed obligations under foreign loans regulations.
It is not clear whether voting rights of members of the Member’s Council of a Single LLC is based on (1) the amount of charter capital that such member represents, or (2) principle one person-one vote. Article 75.5 of the Enterprises 2014 provides that unless otherwise provided in the charter, each member of the Members’ Council of a Single LLC has one vote. This provision suggests that in the charter of the Single LLC, the owner of a Single LLC can allocate different voting rights to members of the Members’ Council who are usually the representatives of the owner in the Single LLC. The most common criteria is based on the amount of charter capital of the Single LLC represented by each member. The ability to allocate different voting rights to different members of a Single LLC is important since the owner of a Single LLC may have different shareholders who want to directly manage the Single LLC.
In the latest draft amendment to the Securities Law 2006, compared with the earlier draft, the following new points , among others, are introduced :
· “Indirect ownership” of securities is defined to mean holding securities through a “related person” or an entrustment arrangement.
· The criteria of a professional investor is reduced. A company with a paid-up charter capital of VND 100 billion (about US$ 4.5 million) instead of VND 1,000 billion can now qualify as a professional investor. An individual with a portfolio of VND 2 billion (instead of a trading volume of VND 2 billion per month) or annual taxable income of VND 1 billion can now qualify as a professional investor. Qualifying as a professional investor is important since only a professional investor or a strategic investor could participate in a private placement of shares by a public company.
· Major customers or counterparties are no longer considered as a related person of a public company.
· The latest draft amendment seems to allow for issuance of shares at a price below par value if the current trading price of the issuer is lower than par value.