Debt and asset purchase activities of the Vietnam Debt Trading Company

1. What are the objects in the activities of receiving and purchasing debt and assets of the Vietnam Debt Trading Company?

According to the provisions of Point a, Clause 2, Article 5 of the Charter of organization and operation of the Vietnam Debt Trading Company Limited Liability Company issued with Circular 42/2021/TT-BTC (hereinafter referred to as the Charter of the Vietnam Debt Trading Company), the Vietnam Debt Trading Company carries out its activities. Receipt and purchase of the following types of debt and assets:

– Receipt of debt and assets, including debt and assets excluded from enterprise value when converting ownership of enterprises with 100% charter capital held by the State and one-member limited liability companies belonging to enterprises with 100% charter capital held by the State, public service units according to Government regulations; receivable debts and assets as designated by the Government and the Prime Minister to continue investing, exploiting or processing and recovering capital for the State according to the provisions of Decree 129/2020/ND-CP.

– Buying debt and assets (including land use rights, assets attached to land, assets attached to land formed in the future as security assets of the debt) of organizations and individuals.

2. When is the Vietnam Debt Trading Company obligated to receive debt and assets?

The debt and asset receiving activities of the Vietnam Debt Trading Company are carried out according to regulations in the following cases:

(1) Receiving debts and assets according to the provisions of law on ownership conversion of enterprises with 100% charter capital held by the State, public service units as prescribed in Article 11 of Decree 129/2020/ND-CP:

– Debts and assets transferred and received must ensure that there are enough records and artifacts (for assets). In case the debt and assets do not have enough records and no artifacts left, the Vietnam Debt Trading Company will send a document to the owner’s representative agency and the enterprise or public service unit informing them of the reason for not receiving it so that the enterprise or public service unit can continue to manage, monitor or handle according to the provisions of law on ownership conversion of enterprises and public service units.

– The handover and receipt of debt and assets are permitted. comply with the law on converting ownership of enterprises with 100% charter capital held by the State, public service units.

(2) Receive debts and assets as designated by the Government and Prime Minister according to the provisions of Article 12 of Decree 129/2020/ND-CP:

– Receive debts receivable and assets:

Vietnam Debt Trading Company, the agency representing the owner and the organization with debts and assets handed over shall hand over and receive to handle receivables and assets. assets such as debt, assets excluded from enterprise value, ownership conversion and in accordance with the designated documents of the Government and the Prime Minister.

– Receiving other assets:

+ Vietnam Debt Trading Company receives other assets as designated by the Government and the Prime Minister to continue investing, exploiting or recovering capital for the State. country;

+ Subjects and conditions for receiving and handing over according to the plan approved by competent authorities according to the provisions of law.

3. In what form are the debt and asset purchasing activities of the Vietnam Debt Trading Company carried out?

According to the provisions of Article 13 of Decree 129/2020/ND-CP, the above debt and asset purchasing activities are regulated as follows:

– The Vietnam Debt Trading Company purchases and handles debt and assets according to the tasks and plans approved by the Government and the Prime Minister. appointed by the government.

– The Vietnam Debt Trading Company is allowed to purchase domestic and foreign debts (including bonds, bills of exchange, and other debt instruments held by organizations and individuals, including bills of exchange and bonds issued by the Vietnam Debt Trading Company itself) and assets (including land use rights, assets attached to land, assets attached to land formed in the future as collateral for the debt) of organizations and individuals.

– Receivable debts arising from debt purchasing operations of the Vietnam Debt Trading Company are a type of commodity and are managed and monitored for each purchased debt.

The form of debt and asset purchasing of the Vietnam Debt Trading Company is specified in Article 14 of Decree 129/2020/ND-CP, specifically as follows: sau:

(1) Purchased as directed by the Government and Prime Minister.

(2) Direct agreement with creditors and asset owners.

(3) Participate in bidding and auctions to buy debt and assets.

In addition, the purchase of debt and assets mentioned above is carried out based on the principles specified in Article 15 of Decree 129/2020/ND-CP as follows:

(1) For debt and asset purchase activities as directed:

a) 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 which:

– Debts and assets purchased under designation are debts and assets of enterprises associated with restructuring enterprises under the direction of the Government and Prime Minister in accordance with regulatory authority;

– Designation content includes: debt and asset purchasers; debt and asset purchase price; Measures to support financial handling 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 the Prime Minister to consider and decide on the designated contents after receiving opinions from the Ministry of Finance.

b) Creditors, asset owners and other creditors. 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.

(2) For activities of buying debt and assets for business:

a) 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;

b) Debts and purchased assets must have documents proving creditor rights and asset owner rights;

c) Purchasing debts and assets can only be done when there is an approved plan according to the prescribed level of authority and can be done for each debt, asset or in groups of many different debts and assets of the same creditor, asset owner or of many creditors, asset owners;

d) 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.

Thus, Vietnam Debt Trading Company carries out debt and asset reception activities in cases where there are legal regulations on ownership conversion of enterprises with 100% charter capital held by the State, public service units or as designated by the Government or Prime Minister. In addition, the purchase of debt and assets of this Company is carried out based on the form and principles prescribed by current law.