Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/Non-convertible Redeemable Preference shares- (Securities and Exchange Board of India) (17 Nov 2022)
MANU/SSMD/0047/2022
Capital Market
1. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") was amended vide notification dated November 14, 2022, through insertion of Regulation 59A and 94A with respect to Scheme(s) of Arrangement by entities who have listed their NCDs/NCRPS.
2. The newly inserted Regulation 59A of the Listing Regulations provides that the listed entity that has listed NCDs or NCRPS, which intends to undertake a scheme of arrangement or is involved in a scheme of arrangement shall file the draft scheme with Stock Exchange(s) for obtaining the No-Objection Letter, before filing such scheme with any court or Tribunal. Regulation 94 of the Listing Regulations requires the designated Stock Exchange to forward such draft schemes to SEBI in the manner prescribed by SEBI.
3. It is pertinent to note that Regulation 11 of the Listing Regulations, inter-alia, provides that any scheme of arrangement/amalgamation/merger/reconstruction/reduction of capital etc. to be presented to any Court or Tribunal, does not in any way violate, override or limit the provisions of securities laws or requirements of the Stock Exchanges.
4. This circular contains the operational aspects with reference to scheme(s) of arrangement by entities who have listed their NCDs/NCRPS. The details of the requirements to be complied with are given in Annex-I.
5. Applicability: Chapter XV of the Companies Act, 2013 deals with compromises, arrangements and amalgamations by companies. This circular is applicable to all listed entities that have listed NCDs/NCRPS and intend to undertake or are involved in a scheme of arrangement as per Chapter XV of the Companies Act, 2013. The provisions of this circular shall be applicable with immediate effect.
6. An entity that has listed only NCDs/NCRPS, shall file the draft scheme of arrangement in terms of Regulation 59A alongwith fees as specified in Clause 2 of Schedule XI of the Listing Regulations.
7. In case an entity has listed both specified securities and NCDs/NCRPS, a single filing of the draft scheme of arrangement in terms of Regulations 37 and 59A of the Listing Regulations would suffice. However, fees shall be paid in terms of clause 1 of Schedule XI of the Listing Regulations.
8. The Stock Exchanges are advised to bring the provisions of this circular to the notice of listed entities and also to disseminate the same on their websites.
9. The provisions of this circular shall be inserted as Chapter VIA of the LODR Operational Circular dated July 29, 2022.
Tags : SCHEME ARRANGEMENT ENTITIES
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