APPLICATION FOR INITIAL PUBLIC OFFERING OF JOINT-STOCK COMPANY

Public offering is an effective method of raising capital for joint stock companies on the securities market. For initial public offering, joint stock companies must comply with regulations on conditions and registration procedures as prescribed by law. Violations of regulations on initial public offering can result in businesses being fined up to VND 600 million.  

1. Public offering

Public offering means the offering of securities:

– Through mass media;

– To at least 100 investors, not including professional investors;

– To unidentified investors.

2. Requirements for initial public offering of joint-stock company

– The contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;

– The company has profit over the last 02 years and has no accumulated loss on the offering date;

– There is a plan for issuance and use of capital generated by the offering ratified by the General Meeting of Shareholders;

– At least 15% of its voting shares have been sold to at least 100 non-major shareholders. If the issuer’s charter capital is VND 1.000 billion or above, the ratio shall be 10%;

– Before the offering date, the major shareholders have made a commitment to hold at least 20% of the issuer’s charter capital for at least 01 year from the end of the offering;

– The issuer is not undergoing criminal prosecution and does not have any unspent conviction for economic crimes;

– The offering is consulted by a securities company, unless the issuer is already a securities company;

– The issuer has a commitment to have its shares listed or registered on the securities trading system after the end of the offering;

– The issuer has an escrow account to receive payments for the offered shares.

>> PROCEDURES FOR INITIAL PUBLIC OFFERING https://linconlaw.vn/procedures-for-initial-public-offering/

3. Application for registration of initial public offering of joint-stock company

– The application form;

– The prospectus;

– The decision of the General Meeting of Shareholders to ratify the plan for issuance and the plan for use of capital generated by the offering, and the commitment to have the shares listed or registered on the securities trading system;

– Financial statements of the issuing organization for the most recent 02 years;

– The public offering consulting contract, unless the issuer is a securities company;

– The securities underwriting agreement (if any);

– In case of an underwriting group, the underwriting agreements shall be enclosed with the contracts between the underwriters.

– These documents shall be sent to SSC before the issuance date of the offering registration certificate.

– The decision of the Board of Directors to approve the IPO application.;

If the IPO is conducted by a credit institution, the application must be approved in writing by State Bank of Vietnam (SBV) regarding the charter capital increase as prescribed by credit institution laws. If the IPO is carried out by an insurer, the application must be approved in writing by the Ministry of Finance regarding the charter capital increase as prescribed by insurance laws.

– The written commitment of the Board of Directors to list or register shares on the securities trading system;

– The written agreements between the shareholders holding the offered shares and the company regarding the offering plan and offer price in case of offering prices held by shareholders;

– The company’s charter;

– The commitment to comply with the regulations:

+ At least 15% of its voting shares have been sold to at least 100 non-major shareholders. If the issuer’s charter capital is 1.000 billion VND or above, the ratio shall be 10%; and

+ The issuer is not undergoing criminal prosecution and does not have any unspent conviction for economic crimes.

–        The major shareholders’ written commitment to hold at least 20% of the company’s charter capital for at least 01 year from the end of the offering;

–        A bank’s or FBB’s confirmation on opening of an escrow account to receive payments for the offered shares;