SEBI limits exemption from open offer on debt conversion

By Ambarish and Mihir Roy, Shardul Amarchand Mangaldas & Co
0
2323
LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link

The Securities and Exchange Board of India (SEBI) no longer considers entities that are not scheduled commercial banks (SCBs) or all India financial institutions (AIFIs) as “lenders” for exemption from a mandatory open offer under regulation 10(1)(i) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (regulations).

SEBI
Ambarish
Partner
Shardul Amarchand Mangaldas & Co

The takeover code conferred exemption to mandatory open offer for:

  1. acquisition of primary shares from a borrower company or secondary shares from lenders pursuant to a debt restructuring scheme under the guidelines issued by the Reserve Bank of India (RBI),
  2. acquisition of shares, not involving a change of control, in a corporate debt restructuring scheme notified by the RBI, if the scheme has been approved by a special resolution of shareholders,
  3. conversion of lenders’ debt into equity as a part of a debt restructuring scheme.

On 29 March 2019, SEBI amended the regulations. It deleted the first two exemptions and added an explanation to the third exemption that defined lenders as all SCBs (excluding regional rural banks) and AIFIs. A similar explanation was added to the provision exempting lenders (who acquire securities pursuant to conversion of debt as part of debt restructuring under RBI guidelines) from compliance with the chapter for preferential issue under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Some of SEBI’s justifications for the amendments were:

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

Ambarish is a partner and Mihir Roy is a senior associate at Shardul Amarchand Mangaldas & Co.

SEBI

Shardul Amarchand Mangaldas & Co
Express Towers, 23rd Floor
Nariman Point
Mumbai – 400 021
Executive Chairman: Shardul Shroff
Managing Partner Mumbai:
Akshay Chudasama
Contact details
Tel: +91 22 4933 5555
Email: Connect@AMSShardul.com
New Delhi | Mumbai | Gurugram | Chennai | Bengaluru | Ahmedabad | Kolkata

 

LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link