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New rules govern State firm IPOs
A Ministry of Finance circular providing guidelines for the initial public offering (IPO) of equitised State-run companies will go into effect on February 15th.
Expenses for the equitisation of an enterprise valued at over VND100 billion (US$4.76 million) should not exceed VND500 million ($23,800), the circular stipulates.
The maximum expense levels are VND400 million for a company valued between VND50 billion and VND100 billion, VND300 million for VND30 billion to VND50 billion, and VND200 million for below VND30 billion.
Share prices will be determined at auction, with an initial price no lower than the face value of VND10,000 per share.
Prices of preferential shares reserved for company employees can comprise as much as 60 per cent of the lowest winning bid, if a company hold public auctions before selling stakes to its strategic partners.
If the company sells shares before organising public auctions, preferential share prices can comprise as much as 60 per cent of the lowest price determined through negotiation or bids with strategic partners.
A State-owned company must complete the IPO within three months of the day its equitisation plan is adopted by authorities, the ministry stipulates. Affiliates and subsidiaries are not allowed to take part in the IPO of their parent company.
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