Decision No. 109/2003/QD-TTg dated June 05, 2003 of the Prime Minister on the establishment of the company for sale and purchase of enterprises’ outstanding debts and assets

DECISION

ON THE ESTABLISHMENT OF THE COMPANY FOR SALE AND PURCHASE OF ENTERPRISES’ OUTSTANDING DEBTS AND ASSETS

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the April 30, 1995 Law on State Enterprises;

Pursuant to the Government’s Decree No. 69/2002/ND-CP of July 12, 2002 on the management and handling of outstanding debts for State enterprises;

Pursuant to the Government’s Decree No. 178/CP of October 28, 1994 defining the tasks, functions and organizational apparatus of the Ministry of Finance;

At the proposal of the Minister of Finance in Report No. 67 TTr/BTC of November 29, 2002 on the scheme on establishment of the company for sale and purchase of enterprises’ outstanding debts and assets,

DECIDES:

Article 1.- To establish the company for sale and purchase of enterprises’ outstanding debts and assets (hereinafter called Debt Sale and Purchase Company for short) in order to handle outstanding debts, unnecessary assets pending liquidation, and poor-quality supplies left in stock (hereinafter called outstanding debts and assets for short), thus contributing to making healthy the enterprise finance and accelerating process of State enterprise reorganization and transformation.

Article 2.- The Debt Sale and Purchase Company is an independent cost-accounting State enterprise, has its own seal and is allowed to open its accounts at the State Treasuries and commercial banks according to law provisions.

The Debt Sale and Purchase Company has its head-office in Hanoi and branches and representative offices in some provinces and cities.

Article 3.- Working capital of the Debt Sale and Purchase Company includes:

1. The Company’s charter capital: VND 2,000 (two thousand) billion. In which:

a/ Allocations by the State budget from the source of funding for transformation of State enterprises and commercial banks in the 2001-2003 period: VND 500 (five hundred) billion.

b/ The remainder shall be gradually allocated by the State budget till 2005.

2. Self-mobilized capital sources, including: capital added from profits, credit loans and proceeds from bond issuance and mobilization of other lawful sources according to business demands.

Article 4.- Objects and business scope of the Debt Sale and Purchase Company are outstanding debts and assets of enterprises and other activities prescribed in Article 5 of this Decision.

Article 5.- Business activities of the Debt Sale and Purchase Company include:

1. To purchase enterprises’ outstanding debts and assets (including assets and land-use right used as security for the debts) in the forms of: direct negotiation, bidding, auction or designation by the Prime Minister. To receive and handle debts and assets which are excluded and not calculated into the value of enterprises when carrying out the transformation of State enterprises’ ownership.

2. To handle the purchased and received debts and assets:

a/ To claim debts;

b/ To sell debts and assets in the forms of: direct negotiation, bidding or auction;

c/ To use the debts and assets to make investment in the forms of contribution of share capital, contribution of capital to joint ventures, and business cooperation according to law provisions;

d/ To preserve, repair and upgrade assets for sale, lease, investment, production and business organization or setting up of joint ventures for exploitation thereof.

3. To mobilize capital in the form of issuing debt-purchasing bonds for the purchase of a high-value debt with security assets.

4. To provide consultancy and brokerage in handling outstanding debts and assets.

5. To deal in other production and business lines as prescribed by law.

Article 6.- Rights and obligations of the Debt Sale and Purchase Company:

1. The Company shall have the rights to:

a/ Exercise the rights of State enterprises as prescribed by the Law on State Enterprises;

b/ Get access to relevant information and data at specialized management agencies such as tax agencies, enterprise finance agencies, commercial banks, business registration agencies, securities trading centers,… in service of the sale, purchase and reception of enterprises’ outstanding debts and assets, so as to ensure that the sale and purchase of debts and assets shall be carried out with efficiency;

c/ Establish its rights to own and manage the purchased and received assets according to law provisions;

d/ Join concerned indebted enterprises in formulating and realizing plans on debt rescheduling and plans on organization of production and business activities, aiming to restore and develop these enterprises, and have sources for debt repayment;

e/ Request State enterprises having already gone through reorganization or ownership transformation to transfer their outstanding debts and assets already excluded when determining the value of enterprises subject to ownership transformation, together with relevant documents.

2. The company shall have the obligations to:

a/ Perform the obligations of State enterprises as prescribed by the Law on State Enterprises;

b/ Provide adequate information and create conditions for clients to inquire into matters related to the sale and purchase of outstanding debts and assets carried out by the Company;

c/ Carry out the tasks of handling outstanding debts and assets as designated by the Prime Minister or assigned under the current regulations.

Article 7.- Principal contents on financial mechanism of the Debt Sale and Purchase Company

1. To sell and purchase outstanding debts and assets at negotiable prices, so as to ensure business efficiency and preserve and develop the State capital at the enterprises.

In cases where the Company performs the tasks of handling outstanding debts and assets at State enterprises under the Prime Minister’s designation, it shall be entitled to the State budget’s support.

2. Turnovers, business costs and profits of the Debt Sale and Purchase Company:

a/ The Company’s turnovers shall include:

- The money amounts actually earned from debt claiming and re-selling;

- The proceeds from the sale of assets;

- The proceeds from production and business activities;

- The proceeds from the contribution of capital to joint ventures, contribution of equity capital and business cooperation according to law provisions;

- The charges and commissions earned from consultancy and/or brokerage activities in handling outstanding debts and assets;

- The value recovered from the sale of equities or transfer of contributed capital;

- The proceeds from activities of leasing or jointly exploiting assets ;

- Other proceeds.

b/ The Company’s business costs shall cover:

- Expenses for the purchase of debts and assets;

- Expenses for debt claiming;

- Expenses for provision of consultancy and brokerage in handling outstanding debts and assets;

- Expenses for activities of selling debts and equities and transferring contributed capital;

- Expenses for preservation, investment, repair and upgrading of assets;

- Other expenses related to the sale, purchase and reception of outstanding debts and assets;

- Expenses for the Company’s management.

c/ The Company’s profits and the mechanism for distribution thereof shall comply with the regulations applicable to State enterprises.

3. Wages and bonuses for laborers in the Company shall be determined according to regulations applicable to State enterprises.

Article 8.- To assign the Minister of Finance to decide on:

1. The structure and organization of the managerial and administering apparatus of the Company.

2. The appointment and dismissal of members of the Company’s leadership.

3. The financial mechanism and charter for the organization and operation of the Company.

4. The experimental handling of outstanding debts and assets at 20 State enterprises included in the reformation program having debts and assets valued at VND 5 billion or more, so as to draw experiences and perfect the mechanism for the operation of the Debt Sale and Purchase Company.

Article 9.- This Decision takes effect 15 days after its publication in the Official Gazette.

The ministers, the heads of the ministerial-level agencies, the heads of agencies attached to the Government, the presidents of the provincial/municipal People’s Committees, the chairmen of the Management Board and general directors of State Corporations shall have to implement this Decision.