Conditions and Dossier for Public Securities Offering by a Company After Enterprise Restructuring

What is a public company?

Under Clause 1, Article 32 of the Securities Law 2019 (as amended and supplemented by Law No. 56/2024/QH15), a public company is a joint stock company falling into one of the following two cases:

– A company with contributed charter capital of VND 30 billion or more and with at least 10% of voting shares held by at least 100 investors who are not major shareholders;

– A company that has successfully conducted an initial public offering of shares through registration with the State Securities Commission.

What conditions must a public company after enterprise restructuring meet to conduct a public securities offering?

Under Article 30 of Decree No. 155/2020/ND-CP, the conditions for a public company after enterprise restructuring to offer additional shares to the public, offer convertible bonds or bonds with warrants to the public; and for a company after enterprise restructuring to offer bonds to the public include:

– Meeting the corresponding conditions for public offering of shares and bonds, including the condition that the company’s business operations are profitable with no accumulated losses.

– The business operations of the year immediately preceding the offering registration year must be profitable, and there must be no accumulated losses as of the offering registration year, based on:

+ Where the company registers the offering in the year of restructuring: a pro-forma combined financial information report for the year immediately preceding the restructuring year of the issuer, assured by an approved audit organization with an unqualified opinion; and the issuer’s most recent quarterly financial report;

+ Where the company registers the offering in the year immediately following the restructuring year (for consolidation):

(1) A pro-forma combined financial information report for the last fiscal year before the restructuring of the issuer, assured by an approved audit organization with an unqualified opinion;

(2) The issuer’s financial report for the first fiscal year after the restructuring, audited by an approved audit organization;

(3) The issuer’s most recent quarterly financial report (if any). The profitability condition is determined based on the total after-tax profit on the pro-forma combined financial information report for the last fiscal year and on the financial report for the first fiscal year;

– Where the company registers the offering from the year immediately following the restructuring year onwards (for merger, acquisition, or asset sale cases), or from the second year after the restructuring year onwards (for consolidation cases): the most recent annual financial report audited by an approved audit organization and the issuer’s most recent quarterly financial report (if any).

What dossier must a public company after enterprise restructuring prepare to register a public securities offering?

Under Article 31 of Decree No. 155/2020/ND-CP, the registration dossier for a public securities offering by a company after enterprise restructuring, for separate cases, is regulated as follows:

– Where the company registers the offering in the year of restructuring: the registration dossier shall follow the corresponding provisions on the registration dossier for public offering of additional shares, convertible bonds, bonds with warrants by public companies, and the registration dossier for public offering of bonds, in which the annual financial reports audited by an approved audit organization for the 02 years immediately preceding the offering registration year are replaced by the following reports:

+ Annual financial reports audited by an approved audit organization of the enterprises participating in the restructuring for the 02 years immediately preceding the restructuring year;

+ A pro-forma combined financial information report for the year immediately preceding the restructuring year of the issuer, assured by an approved audit organization;

+ The financial report for the last fiscal year before the restructuring of the enterprises participating in the restructuring (for consolidation cases).

– Where the company registers the offering in the year immediately following the restructuring year: the registration dossier shall follow the corresponding provisions on the registration dossier for public offering of additional shares, convertible bonds, bonds with warrants by public companies, and the registration dossier for public offering of bonds, in which the annual financial reports audited by an approved audit organization for the 02 years immediately preceding the offering registration year are replaced by the following reports:

+ The issuer’s financial report for the first fiscal year after the restructuring, audited by an approved audit organization, and the pro-forma combined financial information report for the last fiscal year before the restructuring of the issuer, assured by an approved audit organization (for consolidation cases);

+ The issuer’s financial report for the restructuring year audited by an approved audit organization (for merger, acquisition, or asset sale cases);

+ The annual financial report for the year immediately preceding the restructuring year, audited by an approved audit organization, of the enterprises participating in the restructuring.

– Where the company registers the offering in the second year immediately following the restructuring year (for consolidation cases), the registration dossier includes:

+ The registration dossier under the corresponding provisions on the registration dossier for public offering of additional shares, convertible bonds, bonds with warrants by public companies, and the registration dossier for public offering of bonds, in which the annual financial report for the second year immediately preceding the offering registration year is replaced by the following reports:

(1) The issuer’s financial report for the first fiscal year after the restructuring, audited by an approved audit organization;

(2) The financial report for the last fiscal year before the restructuring, audited by an approved audit organization, of the enterprises participating in the restructuring;

+ The annual financial report for the year immediately preceding the restructuring year, audited, of the enterprises participating in the restructuring.

– Where the company registers the offering from the second year after the restructuring year (for merger, acquisition, or asset sale cases), or from the third year after the restructuring year (for consolidation cases): the registration dossier shall follow the corresponding provisions on the registration dossier for public offering of additional shares, convertible bonds, bonds with warrants by public companies, and the registration dossier for public offering of bonds.

Accordingly, the above is some information on the conditions for public securities offering for public companies after enterprise restructuring and the dossier for registering such offerings.