Circular 09/2022/TT-BTC amend Regulation on approval of foreign loans of enterprise with more than 50% of charter capital held by the State

CIRCULAR

Amending and supplementing a number of articles of the Regulation on review, verification and approval of foreign loans by the mode of self-borrowing and self-payment of the enterprise with more than 50% of charter capital held by the State, issued together with the Minister of Finance's Circular No. 153/2014/TT-BTC dated October 20, 2014

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Pursuant to the Law on the Management and Use of State Capital Invested in Production and Business at Enterprises dated November 26, 2014;

Pursuant to the Law on Enterprises dated June 17, 2020;

Pursuant to the Ordinance on Foreign Exchange dated December 13, 2005, and the Ordinance Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange dated March 18, 2013;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government's Decree No. 91/2015/ND-CP dated October 13, 2015, on investment of state capital in enterprises and management and use of capital and assets at enterprises;

Pursuant to the Government’s Decree No. 32/2018/ND-CP dated March 08, 2018, amending and supplementing a number of articles of the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, on investment of state capital in enterprises and management and use of capital and assets at enterprises;

Pursuant to the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020, amending and supplementing a number of articles of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, on transformation of state enterprises and single-member limited liability companies with 100% state enterprise-invested charter capital into joint-stock companies; the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, on investment of state capital in enterprises and management and use of capital and assets at enterprises, and the Government’s Decree No. 32/2018/NDCP dated March 08, 2018, amending and supplementing a number of articles of the Decree No. 91/2015/ND-CP;

Pursuant to the Government's Decree No. 10/2019/ND-CP dated January 24, 2019, prescribing reporting regimes applicable to state administrative agencies;

Pursuant to the Government's Decree No. 219/2013/ND-CP dated December 26, 2013, on management of enterprises’ borrowing of foreign loans and payment of foreign debts without government guarantee;

At the proposal of the Director General of the Department of Corporate Finance;

The Minister of Finance hereby promulgates the Circular amending and supplementing a number of articles of the Regulation on review, verification and approval of foreign loans by the mode of self-borrowing and self-payment of the enterprise with more than 50% of charter capital held by the State, issued together with the Minister of Finance's Circular No. 153/2014/TT-BTC dated October 20, 2014.

Article 1. Amending and supplementing a number of articles of the Regulation on review, verification and approval of foreign loans by the mode of self-borrowing and self-payment of the enterprise with more than 50% of charter capital held by the State, issued together with the Minister of Finance's Circular No. 153/2014/TT-BTC dated October 20, 2014

1. To amend and supplement Article 1 as follows:

“Article 1. Scope of regulation and subjects of application

1. Scope of regulation

This Regulation prescribes the content of the Ministry of Finance's appraisal and approval of foreign loans by the mode of self-borrowing and self-payment in the form of loan contracts attached to investment projects of enterprises with 100% charter capital held by the State.

2. Subjects of application

a) Owner-representing agencies;

b) Enterprises with 100% charter capital held by the State, excluding credit institutions;

c) Related agencies, organizations and individuals.”.

2. To amend and supplement Article 2 as follows:

“Article 2. Interpretation of terms

In this Regulation, the terms below are construed as follows:

1. Enterprises with 100% of charter capital held by the State (hereinafter referred to as enterprises) include:

a) Single-member limited liability companies with 100% charter capital held by the State, which are parent companies of state economic groups, parent companies of state corporations, or parent companies in parent company-subsidiary groups;

b) Independent single-member limited liability companies with 100% charter capital held by the State.

2. Foreign loans on the self-borrowing and self-payment principle specified in this Regulation mean medium- and long-term foreign loans by the mode of self-borrowing and self-payment with the lender without government guarantee for implementation of an enterprise's investment projects (hereinafter referred to as foreign loans).

3. Lender refers to a foreign agency, organization or individual that grants foreign loans to an enterprise.

4. Investment project means a collection of proposals to spend capital over a medium or long term on investment and business activities in a specific locality within a given period (hereinafter referred to as project).”.

3. To amend and supplement Article 3 as follows:

“Article 3. Principles for appraisal and approval of the foreign loan policy

1. Complying with regulations on capital raising, borrowing of foreign loans by the mode of self-borrowing and self-payment applicable to enterprises with 100% charter capital held by the State in accordance with the law on management and use of state capital invested in production and business at enterprises, and the law on management of enterprises’ borrowing of foreign loans and payment of foreign debts without government guarantee.

2. The Ministry of Finance shall appraise and approve the foreign loan policy on the basis of the competent authority's project investment decision, the owner-representing agency's proposals and dossiers specified in Article 5 of this Regulation.

3. Enterprises shall bear all risks and take responsibility before the law during the course of raising, management and use of foreign loan capital by the mode of self-borrowing and self-payment and shall make full payment for the foreign loans on a timely manner according to the signed agreements.”.

4. To amend and supplement Clauses 2, 3, 4, 5 and 8 Article 4 as follows:

“2. Projects using foreign loans must serve production and business activities in the main business lines of the enterprise, be invested by the enterprise and be part of the 5-year development investment plan and annual production and business plan of the enterprise.

3. The owner-representing agency has approved the foreign loan policy.

4. The lender has issued a written agreement on grant of foreign loans.

5. The total liabilities of the enterprise (including the value of guarantees for subsidiaries borrowing capital from credit institutions) must not exceed three times the equity of the enterprise recorded on the quarterly or annual financial statements of the enterprise at the time closest to the time of submission of dossiers for appraisal by the Ministry of Finance under Point a Clause 3 Article 23 of the Law on the Management and Use of State Capital Invested in Production and Business at Enterprises dated November 26, 2014. In case of raising capital above this prescribed level, it must be approved by the owner-representing agency.

8. Having a financial plan to ensure the ability to repay foreign loans.”.

5. To amend and supplement Article 5 as follows:

“Article 5. Regulations on dossiers for appraisal and approval of the foreign loan policy

A dossier for the Ministry of Finance’s appraisal and approval of the enterprise’s foreign loan policy, provided by the owner-representing agency, must comprise:

1. An official dispatch from the owner-representing agency, requesting the Ministry of Finance to appraise and approve the enterprise's foreign loan policy, with detailed explanations on the following information:

a) The satisfaction of conditions for appraisal and approval of the foreign loan policy as prescribed in Article 4 of this Regulation;

b) The owner-representing agency's opinions on the necessity of the foreign loans, the ability to balance reciprocal capital of the enterprise, the ability to repay foreign loans, and the financial capacity of the enterprise.

2. The owner-representing agency's document approving the foreign loan policy, including:

a) Loan purposes;

b) Main conditions of foreign loan: Value of foreign loan, currency of debt, loan term, interest rate and fees related to foreign loan, repayment method, grace period, and debt repayment period;

c) Other basis terms and conditions related to the foreign loan (if any);

d) Basic information in the financial plan of the project using the foreign loan, including total investment, investment capital structure, foreign loan disbursement progress, annual reciprocal capital arrangement plan of the enterprise.

3. 5-year development investment plan and annual production and business plan of the enterprise.

4. The lender's written approval of grant of the foreign loan to implement the project, with the following conditions for the foreign loan: Value of foreign loan, currency of debt, loan term, interest rate and fees related to foreign loan, repayment method, grace period, debt repayment period, and other basis conditions related to the foreign loan (if any).

5. The competent authority's project investment decision or decision on approval of mine development plan (FDP) for oil and gas projects.

6. Financial plan of the project using foreign loans prepared by the enterprise, which explains the total investment data, investment capital structure (reciprocal capital of the enterprise, capital from foreign loans and other capital sources), foreign loan disbursement progress, annual reciprocal capital arrangement plan, plan to balance annual loan repayment sources from depreciation, profits from the project and accompanied tables.

7. The latest enterprise registration certificate.

8. Separate financial statements and consolidated financial statements (in case the enterprise is the parent company of a state-owned economic group, parent company of a state corporation, or parent company in parent a company-subsidiary group), that have been audited in accordance with law for the last 3 consecutive years and the latest quarterly financial statements of the enterprise up to the time of request for the Ministry of Finance's appraisal.

In case the enterprise has not yet operated for full 3 consecutive years, the owner-representing agency shall give opinions on its repayment capacity, enclose with the audited financial statement for the latest year, and quarterly financial statement of the enterprise.

9. The enterprise's report on the value of guarantees for subsidiaries borrowing capital from credit institutions, which remains valid at the end of the year and the end of the nearest quarter up to the time of request for the Ministry of Finance's appraisal (if any).

10. The enterprise’s reports on overdue debts at financial institutions and credit institutions, overdue debts related to guaranteed amounts, on-lending from foreign loans from the Government and state budget at the time of request for the Ministry of Finance's appraisal.”.

6. To amend and supplement Article 6 as follows:

“Article 6. Order, procedures and contents of appraisal and approval of the foreign loan policy

1. Within 15 working days after receiving the complete dossier provided by the owner-representing agency, the Ministry of Finance shall, based on the dossier appraisal result, notify the result of appraisal and approval of the foreign loan policy, and send it to the owner-representing agency.

2. Appraisal contents of the Ministry of Finance:

a) The satisfaction of conditions for appraisal and approval of the foreign loan policy;

b) The completeness of the dossier;

c) The financial situation of the enterprise at the time of appraisal;

d) The enterprise's plan for balance of reciprocal capital when borrowing foreign loans by the mode of self-borrowing and self-payment;

dd) Ability to repay foreign loan under the policy approved by the owner-representing agency at the time of appraisal.

3. The owner-representing agency shall give explanations for the opinions and contents provided to the Ministry of Finance during the appraisal and approval of the foreign loan policy.”.

7. To amend and supplement Article 8 as follows:

“Article 8. Supervision regime

1. The owner-representing agency shall supervise the management and use of foreign loans by enterprises under the management to ensure proper and effective use of such loans and sufficient source for repayment as prescribed. In case the enterprise uses the loans for improper purposes, or encounters financial difficulties leading to the risk of not being able to repay debt, the owner-representing agency shall organize the inspection and clarification of objective and subjective reasons, and solution plans for consideration and settlement according to competence.

2. The Ministry of Finance shall assume the prime responsibility for, and coordinate with related agencies in, conduction inspection and supervision according to its competence and the law on management of enterprises’ borrowing of foreign loans and payment of foreign debts without government guarantee.”.

8. To amend and supplement Clauses 1 and 2 Article 9 as follows:

“1. The owner-representing agency shall:

a) Approve the foreign loan policy and provide sufficient dossiers for the Ministry of Finance for appraisal and approval of the foreign loan policy, for the cases specified in Clause 1 Article 1 of this Regulation;

b) In case of changing to the contents compared to the dossier submitted to the Ministry of Finance for appraisal and approval without changing the contents specified at Points c and dd Clause 2 Article 6 of this Regulation, the owner-representing agency shall proactively review and approve according to its competence, without sending to the Ministry of Finance for re-appraisal.

2. The members’ council or company president shall:

a) Request the owner-representing agency to review and approve the foreign loan policy in accordance with the law on management and use of the state capital invested in production and business at enterprises, and the law on management of enterprises’ borrowing of foreign loans and payment of foreign debts without government guarantee;

b) Take responsibility for the accuracy, truthfulness and completeness of the dossiers and documents reported to the owner-representing agency on the project effectiveness and the enterprise's ability to repay foreign loans;

c) Take responsibility for directing the enterprise to comply with the conditions, order and procedures for borrowing foreign loans in accordance with the law on management of enterprises’ borrowing of foreign loans and payment of foreign debts without government guarantee; sign and implement agreements related to foreign loans as prescribed by law;

d) Organize the management and use of loan capital for the proper purpose. Implement the reporting regime on the use of foreign loans as prescribed by law;

dd) Direct and organize the development of plans for debt repayment, balance of cash flow to ensure the source of debt repayment and full payment of debts according to the schedules as committed to the lender;

e) In case an enterprise cannot repay debt due to subjective reasons, depending on the nature and extent of the violation, the members’ council, company president, and related persons shall be considered and handled in accordance with laws and Charter of the enterprise.”.

Article 2. Replacing and repealing a number of phrases, points, clauses and articles of the Minister of Finance's Circular No. 153/2014/TT-BTC dated October 20, 2014, and the Regulation on review, verification and approval of foreign loans by the mode of self-borrowing and self-payment of the enterprise with more than 50% of charter capital held by the State, issued together with the Minister of Finance's Circular No. 153/2014/TT-BTC dated October 20, 2014

1. To replace a number of phrases as follows:

a) To replace the phrase “review, verification and approval of foreign loans by the mode of self-borrowing and self-payment of the enterprise with more than 50% of charter capital held by the State” with the phrase “appraisal and approval of the foreign loan policy by the mode of self-borrowing and self-payment of the enterprise with 100% of charter capital held by the State” specified in the Minister of Finance's Circular No. 153/2014/TT-BTC dated October 20, 2014, and this Regulation;

b) To replace the phrase “review, verification and approval of foreign loans”, “appraisal and approval of foreign loans”, “review and approval of foreign loans”, “verification and approval of foreign loans” with the phrase “appraisal and approval of the foreign loan policy” specified in this Regulation.

2. To repeal the provisions of Clauses 1 and 7 Article 4; Article 7; Clause 3, Point b Clause 4 Article 9 of this Regulation.

Article 3. Implementation provisions

1. This Circular takes effect from April 1, 2022.

2. Dossiers received by the Ministry of Finance before the effective date of this Circular, of which the foreign loan policy has not yet been completely appraised and approved, shall continue to comply with this Regulation.

3. For foreign loans not regulated by Clause 1 Article 1 of this Regulation, the owner-representing agency shall proactively consider and decide according to its competence. The Ministry of Finance shall not appraise and approve policies for such foreign loans.

4. Any problem arising in the course of implementation should be promptly reported to the Ministry of Finance for review and additional guidance./.