Law

In order for Vietnam Airlines to overcome the difficulties caused by the Covid-19 pandemic, the National
Assembly issued Resolution No. 135/2020/QH14 (Resolution No. 135); Accordingly, support measures
for Vietnam Airlines include:

Allowing the State Bank of Vietnam to refinance and extend no more than 2 times for credit institutions
(excluding credit institutions under special control), so that the Banking Corporation Vietnam Airlines
(Vietnam Airlines) borrows additional capital to serve production and business activities;

Allow Vietnam Airlines to offer more shares to existing shareholders to increase charter capital when it
meets the requirements at Points a, c and d, Clause 2, Article 15 of the Law on Securities;

The Government assigns the State Capital Investment Corporation (SCIC) on behalf of the Government
to invest in buying shares in Vietnam Airlines, under the right to buy shares of state shareholders by the
method of transfer of purchase rights.

1. The issue of state capital investment in production and business at enterprises

According to world practice, the state's use of the state budget for investment is always limited
to certain industries, professions and fields. In line with that practice, on November 26, 2014,
the National Assembly promulgated the Law on management and use of state capital invested in
production and business at enterprises (Law on management and use of capital). Accordingly,
the investment of state capital in enterprises is limited to certain sectors. In the case of
additional capital investment in enterprises in which the State owns shares or contributed
capital, the Law on Management and Use of Capital also stipulates limits on capital contribution.
2. Fair competition in the aviation sector (coi lại sai)
Covid-19 causes damage not only to Vietnam Airlines, but also to airlines in general, with direct
or indirect losses. However, the support measures, instead of being applied to the aviation
industry as a whole, are applied to an enterprise in the industry. From a market perspective, this
creates inequality in access to resources, one of the factors affecting fair competition.
Specifically, in terms of capital, in addition to SCIC buying shares to increase charter capital for
Vietnam Airlines, the National Assembly also allows the State Bank of Vietnam to refinance and
extend no more than 2 times for credit institutions. (excluding credit institutions under special
control), to lend Vietnam Airlines additional capital for production and business activities.
Thus, this decision allows Vietnam Airlines to have two ways to access loans:
- To borrow more capital through the State Bank's refinancing of credit institutions; and
- Extend no more than 2 times for credit institutions (excluding credit institutions under special
control), to lend Vietnam Airlines additional capital for production and business activities.