On October 10, the Government issued Decree No.109/2008/ND-CP on the sale and transfer of 100 per cent State-owned enterprises.
On October 10, the Government issued Decree No.109/2008/ND-CP on the sale and transfer of 100 per cent State-owned enterprises.
This must follow the overall programme for restructuring State-owned enterprises approved by the Prime Minister and comply with the following principles, among others.
First, the buyer or the transferee must not re-sell the enterprise during the term provided in the contract.
Second, the corporate value of the enterprise for sale will be the market price, while that of the enterprise being transferred will be the audited book value.
Third, Decree 109/2008/ND-CP gives preference to selling enterprise by auction, whereby the buyer assumes all outstanding debts. It is further stipulated that the labour collective shall be given priority if paying the same price as other purchasers at the last auction sale.
The buyer shall have the right to choose the legal form of the enterprise after sale and be entitled to continue to lease the land or land allocation with collection of land fee. The seller shall have to cross-check, certify and collect all the receivables or pay all the payables that become due before the sale. The starting selling price shall not be lower than the total value of the State-owned capital or the total value of the enterprise and the value of the land-use right. The method of selling enterprises might be public auction or direct selling, depending on the number of the registered purchasers.
Noteworthy among the permitted buyers are foreign-invested enterprises and foreign financial institutions. For sectors subject to
The Decree also deals with the "transfer" of a 100 per cent State-owned enterprise. "Transfer" here means the change of ownership of the enterprise without collection of money to the labour collective – with clear definition of ownership by each member. The labour collective must undertake to maintain and develop business production, ensure jobs for at least three years and fully pay social insurance for workers. They must not sell, lease or dissolve the enterprise within a minimum period of three years after the transfer, except in case of bankruptcy. The remaining value of the enterprise after the transfer shall be divided into shares or shares of capital contribution and be allotted to each employee. Such shares must not be sold to outside buyers within three years after the transfer.
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