VAMC to increase charter capital to VND2 trillion
VAMC to increase charter capital to VND2 trillion
The government has decided to raise the Vietnam Asset Management Company's (VAMC) charter capital to VND2 trillion (US$93.89 million) from VND500 billion ($23.47 million).
The adjustment is part of the prime ministerial decree 34/2015/ND-CP, issued on March 31, which revises and supplements a number of clauses of the decree 53/2013/ND-CP, issued on May 18, 2013.
The decree, based on the State Bank of Viet Nam's (SBV) proposal, came to effect from April 5 this year. It allowed VAMC to issue bonds to purchase debts at market price (instead of prices fixed by lenders based on inflated collateral evaluation, as has been done thus far).
The bonds issued by VAMC are not required to apply the condition of corporate bond release under the provisions of the government. The rules for mobilising capital, as prescribed by the government -- regarding the State's investment capital in businesses and financial management of the wholly State-owned enterprises – will also not be applied.
The SBV will regulate VAMC's detailed bond issuance. The company's bonds, which are held by credit institutions, can be used to participate in market transactions and refinancing at the SBV.
If the auction of guaranteed assets (non-performing loans) fails, VAMC can sell the assets through another auction or sell directly to the buyers.
Last year, VAMC bought non-performing loans worth about VND96 trillion ($4.57 billion), raising the total bad debts it had purchased from credit institutions to VND135 trillion ($6.43 billion), or 3.4 per cent of the total outstanding loans.
