Can a Vietnam Debt Trading Company buy debt and assets to serve its own business purposes?

Can a Vietnam Debt Trading Company buy debt and assets for business purposes?

According to the provisions of Clause 2, Article 15 of Decree 129/2020/ND-CP, Vietnam Debt Trading Company carries out debt and asset purchase activities to serve its company’s business purposes based on the following principles:

– The debt and asset purchase plan must be effective, have a feasible capital recovery plan, and preserve and develop capital. The debt and asset purchase price is determined by the Vietnam Debt Trading Company on the principle of ensuring the profitability of the debt and asset purchase plan;

– Purchased debt and assets must have documents proving creditor rights and asset owner rights;

– The purchase of debts and assets is only carried out when there is a plan approved according to the delegated authority, and may be implemented for each debt or asset, or for groups comprising multiple debts and assets of the same creditor or asset owner or of multiple creditors or asset owners;

– The Vietnam Debt Trading Company is not allowed to use capital mobilized from organizations and individuals specified in Clause 2, Article 27 of Decree 129/2020/ND-CP to buy back the debt of those same organizations and individuals.

Accordingly, it can be seen that the Vietnam Debt Trading Company can buy debt and assets to serve its company’s business activities with the condition that it must comply with the regulations. the above principles.

How are the principles of purchasing debt and assets as designated by the Vietnam Debt Trading Company regulated?

Vietnam Debt Trading Company buys debt and assets as designated based on Clause 1, Article 15 of Decree 129/2020/ND-CP, specifically as follows:

– Vietnam Debt Trading Company is responsible for developing debt and asset purchase plans (including projects requiring debt handling support) to ensure compliance with the provisions of law and written directives of the Government and Prime Minister for implementation. Vietnam Debt Trading Company uses business capital or capital allocated by the state according to regulations of the Government and Prime Minister to implement the plan to buy debt and assets as directed. In there:

+ Debts and assets purchased as directed are debts and assets of enterprises associated with restructuring enterprises under the direction of the Government and Prime Minister in accordance with prescribed authority;

+ Designation content includes: debt and asset purchasers; debt and asset purchase price; Measures to support financial and asset handling (if necessary);

+ The agency representing the owner of an enterprise with debt and assets is responsible for coordinating with the Vietnam Debt Trading Company and relevant agencies to report to the Government and Prime Minister to consider and decide on the designated contents after receiving opinions from the Ministry of Finance.

– Creditors, asset owners and relevant organizations and individuals are responsible for coordinating with the Vietnam Debt Trading Company to implement the plan developed according to the provisions of Point a, Clause 1 of this Article.

Accordingly, the Vietnam Debt Trading Company purchases debt and assets as directed based on the above principles.

How is debt purchased by the Vietnam Debt Trading Company handled?

Pursuant to Clause 1, Article 17 of Decree 129/2020/ND-CP, the content of handling debt purchased by the Vietnam Debt Trading Company includes:

– Adjusting debt repayment terms, freezing debt, extending debt and adjusting debt interest rates in accordance with the debtor’s ability and market conditions;

– Reduce the obligation to pay interest and part of the principal debt to the debtor but must ensure that the debt purchase plan is effective;

– Agreement with the debtor and related parties to collect debt using assets (including: land use rights, assets attached to land, assets attached to land formed in the future; projects, including real estate projects). Debt collection assets must be valued through an organization with valuation function and ensure there are sufficient documents and conditions to transfer ownership between parties according to the provisions of law;

– Agreement with the debtor and third party to exercise the right to transfer debt repayment obligations to a third party on the principle of ensuring greater convenience for the Vietnam Debt Trading Company in debt handling and debt recovery;

-Agree with the business owner on converting debt into contributed capital to participate in business restructuring according to the provisions of Section 5 Chapter II Decree 129/2020/ND-CP;

– The disposal of assets securing the debt shall be carried out in accordance with the provisions of law and the provisions of this Decree.

Thus, in addition to buying debt and assets as directed, Vietnam Debt Trading Company can also buy debt and assets for its company’s business purposes. The content of handling debt purchased by the Vietnam Debt Trading Company is specifically stipulated in Decree 129/2020/ND-CP mentioned above.