Reporting on the reception, explanation and revision of the draft Law amending and supplementing a number of articles of the Law on Enterprises at the morning meeting of the National Assembly Standing Committee (NASC) on June 9, Minister of Finance Nguyen Van Thang clearly explained the regulation that enterprises are only allowed to issue individual bonds when the total debt payable is not more than 5 times the owner's equity (according to the most recent financial report).
According to the head of the Ministry of Finance, this regulation does not apply to issuers that are state-owned enterprises, bond issuers for real estate projects, banks, insurance companies, insurance brokerage companies, securities companies, and investment fund managers. “In the process of researching, amending, and supplementing this law, the Government has worked many times with businesses and related agencies for nearly a year,” said Mr. Nguyen Van Thang.
According to Mr. Nguyen Van Thang, each country has different regulations on the conditions for issuing private bonds of unlisted enterprises, which is the total debt payable must not exceed 3-5 times the owner's equity.
According to the Minister of Finance, the addition of regulations on debt ratio conditions for enterprises issuing individual bonds aims to increase the financial capacity of the issuing enterprise, limit the risks of bond payment for the issuing enterprise and investors. The value of bonds expected to be issued is not more than 5 times the owner's equity, which basically does not affect capital mobilization for production and business activities, serving the goal of economic growth.
“In the current context, the conditions for issuing individual bonds must still follow the regulations on debt to equity. Only when all stages are completely digitized and transparent can a different management method be proposed,” said the Minister of Finance.
According to Mr. Nguyen Van Thang, "tightening" the regulations on issuing individual bonds aims to ensure that enterprises with capital needs and transparent operations can issue bonds to mobilize medium and long-term capital. At the same time, this regulation also eliminates dishonest businesses that take advantage of policies," said Minister Nguyen Van Thang, and at the same time proposed to stipulate this content in the draft law, instead of the guiding decree to "ensure immediate implementation".
The National Assembly is expected to vote on this draft law on June 17.
Source: https://www.sggp.org.vn/han-che-rui-ro-trong-phat-hanh-thanh-toan-trai-phieu-rieng-le-post798719.html
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