Businesses can negotiate to repay bonds with 'other assets'

The above information is stated in the Decree amending, supplementing and suspending the implementation of a number of articles in the Decrees regulating the offering and trading of individual corporate bonds in the domestic market and the offering of corporate bonds to the international market, which was recently issued by the Government on March 5.

Mr. Bui Thanh Nhon wrote a letter to Novaland 's creditors. (Source: NVL)

Accordingly, the Decree stipulates: For bonds offered in the domestic market, in case the issuing enterprise cannot fully and timely pay the principal and interest of the bonds in Vietnamese Dong according to the issuance plan announced to investors (as prescribed in Article 17 of this Decree), the enterprise can negotiate with the bond owner to pay the principal and interest of the bonds due with other assets.

Negotiations are based on the principle of compliance with the provisions of civil law and relevant laws. For conditional investment and business sectors, the provisions of the law on such conditional investment and business sectors must also be complied with.

However, the Decree clearly states that the negotiation must be approved by the bondholder. The issuing enterprise must disclose unusual information and take full responsibility for the legal status of the assets used to pay the principal and interest of the bonds in accordance with the law.

Another notable point of the Decree is that if an enterprise wants to extend the term of the bond, the maximum period must not exceed 2 years compared to the term in the bond issuance plan announced to investors.

For bondholders who do not agree to changes in the terms and conditions of the bond, the issuing enterprise is responsible for negotiating to ensure the rights of investors.

"In case a bondholder does not accept the negotiation plan, the enterprise must fully perform its obligations to the bondholder according to the bond issuance plan announced to investors (including cases where the change of conditions and terms of the bond has been approved by bondholders representing 65% or more of the total number of bonds)," the Decree requires.

The Decree takes effect from March 5.

Article 3 of the Decree also suspended the effectiveness of the following provisions in Decree No. 65/2022/ND-CP until December 31, 2023:

1. Regulations on determining the status of professional securities investors as individuals at Point d, Clause 1, Article 8 of Decree No. 153/2020/ND-CP are amended at Clause 6, Article 1 of Decree No. 65/2022/ND-CP.

2. Regulations on bond distribution time of each issuance in Clause 7 and Clause 8, Article 1 of Decree No. 65/2022/ND-CP.

3. Regulations on credit rating results for bond-issuing enterprises at Point e, Clause 2, Article 12 of Decree No. 153/2020/ND-CP are amended at Clause 9, Article 1 of Decree No. 65/2022/ND-CP.

FLC: Debt of 1,000 billion VND in bonds will be converted into real estate, considering selling Bamboo Airways shares. FLC shareholders have agreed to plans to extend the bond payment schedule and convert it into real estate. The group is also calculating the plan to transfer Bamboo Airways shares.

Source