Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS)
Summary
This circular amends the SEBI Listing Regulations to introduce specific requirements for schemes of arrangement involving listed Non-convertible Debt securities or Non-convertible Redeemable Preference shares. It mandates that entities file draft schemes with Stock Exchanges to obtain a No-Objection Letter before approaching any court or tribunal. The document outlines operational procedures, including document submission, valuation standards, and conditions for schemes involving unlisted entities. This section mandates the submission of valuation reports by registered valuers and auditor's certificates regarding accounting compliance for listed entities. It outlines specific disclosure requirements for draft schemes, including details on debt structures, financials, and handling of complaints or unpaid dues. The text further defines the procedural timelines and obligations for Stock Exchanges and SEBI in reviewing, querying, and approving these schemes. The listed entity must complete listing and trading of NCDs/NCRPS within sixty days of the NCLT order. Prior to trading, the entity must publish an advertisement with specific financial and operational details in national and regio
Text
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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.
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.
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.
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.
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.
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.
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.
The provisions of this circular shall be inserted as Chapter VIA of the LODR Operational Circular dated July 29, 2022.
Listed entities shall choose one of the Stock Exchange(s) having nationwide trading terminals as the designated Stock Exchange for the purpose of coordinating with SEBI.
Entities listed solely on regional Stock Exchange(s), shall obtain inprinciple approval for listing of NCDs/ NCRPS on any Stock Exchange having nationwide trading terminals.
The listed entity shall submit the following documents to the Stock Exchange(s): (a) Draft scheme of arrangement/ amalgamation/ merger/ reconstruction, etc.
Valuation Report as per Para (5) below, accompanied by an undertaking from the listed entity stating that no material event impacting the valuation has occurred during the intervening period of filing the scheme documents with the Stock Exchange(s) and period under consideration for valuation.
You have read the preview. Create a free account to read the full document and see every order that applied it.
Free accounts include 10 searches/day with full text access.
Source: SecMarx — Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.