1. Listed shares

Listed shares are a class of shares eligible for listing, which are shares issued by joint-stock companies, which have been listed on the stock market. Those shares have been subjected to the stock exchange’s strict inspection system and it has qualified to meet the trade.

2. Conditions for listing shares for post-consolidation public companies

– In case the companies are consolidated, they are all listed companies. A consolidated company is listed when the consolidated companies are not subject to losses for 02 consecutive years based on the annual financial statements of 02 consecutive years preceding the year of consolidation of the consolidated companies.

– In case the consolidated companies are all listed companies, of which at least 01 company has suffered losses for 02 consecutive years before the year of consolidation. A consolidated company is listed when it has a positive ROE, based on the conventional consolidated statement of financial information for the year preceding the year of consolidation of the consolidated company.

– A listed company merges with a non-listed company, in which the total assets of the non-listed companies are worth less than 35% of the total assets of the listed company with the largest total assets. A consolidating company is listed when listed companies participating in the consolidation are not subject to losses for 02 consecutive years based on the annual financial statements of 02 consecutive years preceding the year of consolidation of listed companies.

– If a listed company merges with a non-listed company, it can still list shares, but the total assets of the non-listed companies are worth 35% or more of the total assets of the listed company with the largest total assets. At the same time, the incorporating company must meet meet the listing conditions as prescribed in Clause 1, Article 109 of Decree 155/2020/ND-CP. In particular, the rate of return after tax on equity (ROE) is determined based on the consolidated statement of conventional financial information for 02 consecutive years before the year of consolidation of the consolidating company.

3. Conditions for listing on the Stock Exchange of the company after division or separation of enterprises

Listing conditions for separated companies and companies formed after the enterprise division process shall comply with the provisions of Clause 1, Article 109 of Decree 155/2020/ND-CP.

– In case a listed company splits an enterprise, the separated company may continue to list when it satisfies the conditions that it is a public company specified in the Law on Securities and is not subject to continuous losses for 02 years based on the annual financial statements of 02 consecutive years before the year of separation of the separated company’s enterprise.

– In case a listed company splits an enterprise, the separated company suffers a loss for 02 consecutive years before the year of separation, the separated company may continue to list when it satisfies the conditions of being a public company and has a positive ROE based on the conventional financial information consolidated statement for the year immediately preceding the year of separation The company’s karma was split.

– In case the separated company is not a listed company but has registered for trading on the Upcom trading system for 2 years or more or has made an offering of shares to the public, at the same time, the total assets of the separated companies are worth less than 35% of the total assets of the separated company; at that time, the separated company must meet the listing conditions as prescribed in Clause 1, Article 109 of Decree 155/2020/ND-CP. In which, the criteria specified at Point c, Clause 1, Article 109 of Decree 155/2020/ND-CP are determined based on the annual financial statements of 02 consecutive years preceding the listing registration year of the separated company.

4. Conditions for listing shares on the Stock Exchange of the company after restructuring

A listed company that carries out restructuring activities may continue to list when it is not subject to continuous losses for 02 consecutive years before the year of restructuring based on the consolidated statements of conventional financial information for 02 consecutive years before the year of restructuring.

In case the restructured company is not a listed company but has registered for trading on the Upcom trading system for 02 years or more or has made an offering of shares to the public, the restructured company must meet the listing conditions specified in Clause 1, Article 109 of Decree 155/2020/ND-CP (except for price conditions capitalization and time of trading registration on Upcom system); in which, the criteria specified at Point c, Clause 1, Article 109 of Decree 155/2020/ND-CP are determined based on:

• Consolidated financial information according to the convention of the company actually restructured for 02 consecutive years before the year of listing registration (in case the company registers for listing in the year of restructuring);
• General statements of financial information according to the convention of the restructuring company for the year immediately preceding the year of restructuring and the most recent financial statements of the restructuring company (in case the company registers for listing in the year immediately following the year of restructuring);
• Annual financial statements of the last 02 years of the restructuring company (in case the company registers for listing in the second consecutive year after the year of restructuring).

5. Delisting

In case shares of a public company fail to meet the listing conditions due to mergers, separations of enterprises and cases of enterprise restructuring; or after completing merger activities, separating enterprises and cases of enterprise restructuring but failing to carry out listing registration procedures, requesting reconsideration of listing conditions or changing listing registration within the prescribed time limit, shares of a public company shall be delisted.

6. Relisting Registration

When an organization has delisted shares in case the shares of a public company do not meet the listing conditions due to mergers, separations and cases of enterprise restructuring; or after completing merger activities, enterprise separation and enterprise restructuring cases but failing to carry out registration procedures listing, requesting to reconsider listing conditions or change listing registration within the prescribed time limit may only re-register for listing after trading for at least 02 years on Upcom trading system.

Firstly, regarding the listing registration of the company that has been traded on the Upcom trading system for at least 02 years, including:

• Stock listing registration certificate.
• The register of shareholders of the listing registration organization shall be made within 01 month before the time of submitting the listing registration dossier; enclose a list of major shareholders, strategic shareholders, insiders and related persons of insiders (number, percentage of holdings, duration of transfer restrictions (if any)).
• Commitment of shareholders being individuals or organizations whose ownership representatives are the Chairman of the Board of Directors, members of the Board of Directors, Head of the Supervisory Board and members of the Supervisory Board (Controllers), General Director (Director), Deputy General Director (Deputy Director), Chief Accountant, Financial directors and equivalent management titles elected by the General Meeting of Shareholders or appointed by the Board of Directors and commitments of major shareholders who are related persons of the above subjects to hold 100% of the shares owned by them for a period of 06 months from the date of the first trading of shares on the Stock Exchange and 50% of these shares for the next 6 months.
• Listing consultancy contracts, except for cases where the listing registration organization is a securities company.
• Certificate of business registration, Establishment and operation license or legal papers of equivalent validity.
• Financial statements for 02 consecutive years preceding the listing registration year of the listing registration organization.
• Decision of the General Meeting of Shareholders approving the listing of shares.
• Listing prospectus.

Second, on the practice of listing registration:

Within 30 days from the date of receipt of a complete and valid listing registration dossier, the Stock Exchange shall issue a decision approving the listing; in case of refusal, a written response clearly stating the reasons therefor must be given.

Within 90 days from the date of approval for listing, the listing registration organization must put securities into trading.

The above is the content of KALF’s advice on the listing of shares of public companies after consolidation, merger, division, separation and other cases. All of our above advice opinions are based on applicable legal provisions. If you have any questions or requests about legal issues, please contact us for timely answers.