On 18 July 2011, the Government issued Decree No. 59/2011/ND-CP on the transformation of 100% state-owned enterprises into joint stock companies .The purpose of transformation of state-owned enterprise into joint-stock company is to improve efficiency and competitiveness of the economy.
According to Decree 59, there are three types of enterprises under the equitization, namely (1) a single LLC with 100% State owned capital being a holding company of an State Economic Group; State Corporation; (2) a single LLC with 100% State owned capital under the management of the ministries, ministerial-level agencies, Government agencies, People's Committees of provinces; (3) enterprises with 100% State owned capital which have not been converted into a single LLC.
Enterprises must meet two conditions for equitization: (i) the one that the State does not need to hold 100% charter capital (the list of enterprises in which the State holds 100% charter capital shall be decided by the Prime Minister from time to time) and (ii) the capital owned by the State remains after financial settlement and re-evaluation.
The equitization shall be conducted in form of extra shares issue or partial /total transfer of state capital. The initial offering shall be executed through public auction; or underwriting or direct negotiation.
The Decree takes effect from the May 9, 2011 and replaces Decree No. 109/2007/ND-CP dated June 26, 2007./.-ITD