Decision No. 1977/QD-TTg dated December 8, 2017 of the Prime Minister on on approval for equitization plan of holding company - Petrovietnam power corporation (affiliated to Vietnam National Oil And Gas Group - Petrovietnam)

THE PRIME MINISTER

Decision No. 1977/QD-TTg dated December 8, 2017 of the Prime Minister on approval for equitization plan of holding company - Petrovietnam power corporation (affiliated to Vietnam National Oil And Gas Group - Petrovietnam)

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Law on Enterprise dated November 26, 2014;

Pursuant to the Government’s Decree No. 59/2011/ND-CP dated July 18, 2011 on conversion of 100%-state-owned enterprises into joint-stock companies;

Pursuant to the Government’s Decree No. 189/2013/ND-CP dated November 20, 2013 on amendments to Decree No. 59/2011/ND-CP dated July 18, 2011 on conversion of 100%-state-owned enterprises into joint-stock companies;

Pursuant to the Government’s Decree No. 116/2015/ND-CP dated November 11, 2015 on amendments to Decree No. 59/2011/ND-CP dated July 18, 2011 on conversion of 100%-state-owned enterprises into joint-stock companies;

Pursuant to Decision No. 707/QD-TTg dated May 25, 2017 of the Prime Minister on approval for the scheme for "restructuring of state-owned enterprises, focusing on economic groups and state-owned general companies for the period 2016 to 2020”;

Pursuant to Decision No. 58/2016/QD-TTg dated December 28, 2016 of the Prime Minister on criteria for classifying state-owned enterprises, state-capitalized enterprises and the list of state-owned enterprises to be restructured for the period 2016 to 2020;

At the request of the Minister of Industry and Trade,

DECIDES:

Article 1.To approve the plan for equitization of holding company – PetroVietnam Power Corporation as follows:

1. Name and headquarters

- Full name in Vietnamese: “Tổng công ty Điện lực Dầu khí Việt Nam - Công ty cổ phần.”

- Type of business entity: joint-stock company.

- Business name in Vietnamese: “Tổng công ty Điện lực Dầu khí Việt Nam.”

- Business name in English: PETROVIETNAM POWER CORPORATION.

- Abbreviated name: PV POWER.

- Address of headquarters: Floors 8 and 9, Vietnam Petroleum Institute Building, 167 Trung Kinh, Yen Hoa, Cau Giay, Hanoi.

2. Upon completion of equitization, PV POWER (joint-stock company) has legal status in accordance with Vietnam’s laws and regulations after being issued with an enterprise registration certificate; has a separate seal and may open a bank account as per the law; and operate in conformity with its charter and in accordance with the Law on Enterprise and relevant law provisions.

PV POWER (joint-stock company) will inherits rights, obligations and legitimate interests of PV POWER before conversion; and resume carrying on business lines being conducted by PV POWER and other business lines as per the law.

3. Method of equitization: Selling a part of state-owned stakes at PV POWER)

4. Charter capital and proportion of shares in initial offering

a) Charter capital: VND 23,418,716,000,000 (Twenty-three trillion, four hundred eighteen billion, seven hundred sixteen million Vietnam dong).

b) Proportion of charter capital:

- PetroVietnam holds 1,194,354,516 shares, accounting for 51% of charter capital.

PetroVietnam holds 51% of charter capital of PV POWER (joint-stock company) by the end of 2025.

From 2019, if PetroVietnam and PV POWER (joint-stock company) restructure debts as specified in the request of the Ministry of Industry and Trade and negotiate with credit institutions successfully, PetroVietnam must reduce its shareholding in the PV POWER (joint-stock company) to fewer than 50% of charter capital.

- Shares to be sold to employees at discounted prices prescribed in Clause 1 Article 48 of the Decree No. 59/2011/ND-CP are 1,005,100, accounting for 0.043 of charter capital.

- Shares to be sold to employees at discounted prices in greater quantity prescribed in Clause 2 Article 48 of the Decree No. 59/2011/ND-CP are 1,752,300, accounting for 0.075 of charter capital.

- Shares to be sold at public auctions are 468,374,320, accounting for 20% of charter capital.

- Shares to be sold to strategic investors are 676,385,364, accounting for 28,882% of charter capital.

- Face value of a share is VND 10,000.

5. Public offering

- Starting price: VND 14,400 per share.

- Type of offering: Public auction.

- Financial institution acting as offering advisor: Stock Exchange of Hanoi City.

- Auction place: 2 Phan Chu Trinh, Hoan Kiem, Hanoi.

- Time limit:  A period of 3 months from the date on which the plan for equitization is approved as prescribed without any requirement for re-valuing enterprise.

6. Offering to strategic investors

a) Criteria for selecting strategic investors

- A domestic or foreign investor which has sound financial situation and profits for the last 2 years since the registration for share purchase and has not incurred cumulative losses.

- It has committed in writing to share long-term benefits with the PV POWER, assist PV POWER in one or a number of business lines provided by PV POWER.

- It has committed not to assign their shares within at least 5 years from the date on which the PV POWER is issued with an initial enterprise registration certificate in accordance with Law on Enterprises. If it wishes to assign the aforementioned shares ahead of the above period, it must obtain the ratification of the General Meeting of Shareholders according to Charter of organization and operation of PV POWER (joint-stock company).

- Preferred investor to be selected: an investor having experience in the sector of energy or engineering relating to electric-business (electricity generation, coal supply, LNG fuel supply, maintenance, EPC, OEM, etc.) or an investor having capacity to financial arrangements and assist PV POWER to arrange capital funds for electricity projects to be initiated.

- Preferred investor to be selected: an investor committed to vote for receipt of power plants built by PetroVietnam (if any) for PV POWER in a form as per the law at the time of receipt.

- Make a compensation payment for any breach of commitment, being determined according to actual damage and the state’s right to dispose of total number of shares bought by the strategic investor in breach of the commitment.

b) Prices of offering to strategic investors

Prices of offering to strategic investors are determined as prescribed in laws and regulations in force.

If the shares are offered to strategic investors when the Government s Decree No. 126/2017/ND-CP dated November 16, 2017 on conversion of state-owned enterprises and single-member limited liability companies of which state-owned enterprises wholly holding charter capital into joint-stock companies is in force, such Decree shall prevail.

c) Time limit for offering to strategic investors

Within the period prescribed in the Decree No. 59/2011/ND_CP dated July 18, 2011 of the Government. If the offering to strategic investors cannot be completed within 3 years as prescribed, the Ministry of Industry and Trade shall report on the uncompleted offering to the Prime Minister for consideration.

d) Authorize PetroVietnam to seek for partners, initiate the negotiation with strategic investors according to the approved equitization plan and relevant regulations, send a report on offering results to the Minister of Trade; the Minister of Trade shall then forward it to the Prime Minister as prescribed.

7. PV POWER (joint-stock company) will apply for land lease from the state and pay land rents as prescribed in laws and regulations on land management and use.

8. Personnel transfer plan

- Total employees at the time of announcing enterprise’s value: 1,181.

- Employees to be transferred to the joint-stock company: 1,181.

9. Expenses associated with equitization

The Ministry of Industry and Trade shall approve the statement of expenses associated with equitization; PetroVietnam and PV POWER shall decide and incur expenditures as deemed necessary for equitization as per the law in force.

Article 2.Implementation

1. The Ministry of Industry and Trade

- Decide matters prescribed in Clause 9 Article 1 of this Decision.

- Direct PetroVietnam and PV POWER to announce information about the PV POWER (joint-stock company); initiate offering within 3 months from the signing of this Decision without any requirement for re-valuing the enterprise.

- Supervise the equitization at PV POWER, report on any difficulties arising ultra vires to the Prime Minister for consideration.

2. The Ministry of Planning and Investment shall provide guidelines for enterprise registration of PV POWER (joint-stock company).

3. Board of members of PetroVietnam shall manage PV POWER until the completed taking over of assets, capital, personnel, and land to PV POWER (joint-stock company).

4. The Ministry of Industry and Trade, PetroVietnam and PV POWER must abide by the audit of enterprise-valuing advice results and deal with fiscal matters from prior to official disclosure of value of the PV POWER until it officially becomes a joint-stock company as per the law.

Article 3.This Decision takes effect on the signing date.

Minister of Trade, Minister of Finance, Minister of Natural Resources and Environment, Minister of Planning and Investment, Minister of Labor, War Invalids and Social Affairs, Minister of Home Affairs, heads of relevant agencies, PetroVietnam, Steering committee of equitization and Board of members of PV POWER shall implement this Decision./.

For the Prime Minister

The Deputy Prime Minister

Vuong Dinh Hue