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Banking & Finance

DATC to raise charter capital to $273 million

Released at: 11:23, 31/07/2015

DATC to raise charter capital to $273 million

Draft circular on operations of the Debt and Asset Trading Corporation include increasing its charter capital.

by Quoc Tran

The Debt and Asset Trading Corporation (DATC) may increase its charter capital to VND6 trillion ($273.2 million) from the current VND2.48 trillion ($113.8 million).

The move was outlined in a draft circular on regulations governing the company’s organization and operation, which is expected to replace Circular No. 79/2011/TT-BTC dated June 8, 2011. 

Established in 2004 with charter capital of VND2 trillion ($94 million) from the State budget, the DATC is recognized as a special State-run company. It aims to deal with the bad debts and unused assets of State-owned groups and corporations to improve their financial circumstances, promote restructuring, and transform them into joint stock companies.

The DATC can settle debts by directly retrieving them, acquiring collateralized assets, selling debts, and changing debts into capital contribution. 

The corporation is able to review and settle debts by delineating and extending debts or by adjusting the interest rate on the debt. 

As for purchased assets, DATC can sell them or use them to contribute capital to joint ventures, lend or convert them, or repair or upgrade assets for sale, lease or conducting business. 

Direct asset sales are implemented after auctions or offers for sale as per the regulations. 

In the first half of the year DATC earned total revenue of VND900 billion ($41.2 million), including revenue from debt trading of VND700 billion ($32.1 million), an increase of 1.47 times compared with the same period last year. 

The corporation dissolved the debts and assets at 33 enterprises for VND62.4 billion ($2.86 million) in total, five times higher than the corresponding period last year. 

It also contributed VND68.3 billion ($3.13 million) to the State budget.

The draft circular stipulates regulations on asset disposal. Specifically, asset valuation to clarify the starting price for selling or for negotiations on share contribution, joint ventures and conversion will be done per regulations for businesses in which the government holds 100 per cent of charter capital. 

The draft states that the DATC would be able to buy debts and assets that debt owners wish to sell, including land use rights, bonds, and debts. It also contains different rules for the disposal of debts and assets. 

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