VI What issues must be approved by the General Meeting of Shareholders for a public company when offering private shares? How long does it take for a public company to complete a private share offering? How long after the end of the most recent private share offering can a public company offer the next private share offering? Through today’s article, let’s find out about this issue with Pham Consult!
What issues must be approved by the General Meeting of Shareholders for a public company when offering private shares?
Pursuant to Clause 1, Article 31 of the 2019 Securities Law, it is stipulated as follows:
Private offering of securities by public companies, securities companies, and securities investment fund management companies
1. Conditions for offering of individual shares, individual convertible bonds, and individual warrant-linked bonds by public companies include:
a) Having a decision of the General Meeting of Shareholders approving the issuance plan and using the proceeds from the offering; clearly defining the criteria and number of investors;
b) The subjects participating in the offering include only strategic investors and professional securities investors;
c) The transfer of privately offered shares, privately offered convertible bonds, and privately offered bonds with warrants is restricted to a minimum of 03 years for strategic investors and a minimum of 01 year for professional securities investors from the date of completion of the offering, except for transfers between professional securities investors or in accordance with a legally effective court judgment or decision, an arbitration decision, or inheritance in accordance with the provisions of law;
Thus, a public company offering privately offered shares must have the General Meeting of Shareholders approve the issuance plan and use of the proceeds from the offering; clearly define the criteria and number of investors.
How long does it take for a public company to complete a private offering of shares?
Pursuant to Clause 3, Article 48 of Decree 155/2020/ND-CP, the following provisions are made:
Procedures for private offering of shares
1. The issuing organization shall submit the registration dossier for private offering of shares to the State Securities Commission.
2. Within 07 working days from the date of receipt of the complete and valid dossier, the State Securities Commission shall issue written approval and post on the State Securities Commission’s website the receipt of the complete registration dossier for private offering of shares of the issuing organization; in case of refusal, a written response must be given stating the reasons.
3. The issuing organization shall complete the private offering of shares within 90 days from the date of the State Securities Commission’s written approval.
4. Within 10 days from the date of completion of the offering, the issuing organization must send a Report on the results of the offering, accompanied by confirmation from the bank or foreign bank branch where the blocked account is opened, regarding the proceeds from the offering to the State Securities Commission, and publish information on the website of the issuing organization and the Stock Exchange about the results of the offering.
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Thus, the public company must complete the private offering of shares within 90 days from the date of the State Securities Commission’s written approval.
Note: Within 10 days from the date of completion of the offering, the public company must:
– Send a Report on the results of the offering, accompanied by confirmation from the bank or foreign bank branch where the blocked account is opened, regarding the proceeds from the offering to the State Securities Commission;
– At the same time, publish information on the website of the issuing organization and the Stock Exchange about the results of the offering.
After the end of the most recent private offering, how long will it take for a public company to offer the next private offering?
According to Clause 3, Article 48 of Decree 155/2020/ND-CP, the following provisions apply:
Sequence and procedures for private offering
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7. The interval between the following private offering and issuance of securities must be at least 06 months from the end date of the most recent private offering and issuance, including: private offering of shares; private offering of convertible bonds; private offering of bonds with warrants; private offering of preferred shares with warrants; issuance of shares to exchange shares for shareholders of non-public joint stock companies, exchange of capital contributions for capital contributors of limited liability companies; issuance of shares to exchange shares for a specified number of shareholders in a public company; issuance of shares to exchange debt.
Thus, after the end of the most recent private stock offering, a public company can only offer the next private stock offering at least 06 months after the end of the private stock offering.
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