Listing of Non-Convertible Redeemable Preference Shares (NCRPS) / Non-Convertible Debentures (NCDs) through a Scheme of Arrangement
Summary
This circular provides guidelines for listing Non-Convertible Redeemable Preference Shares (NCRPS) or Non-Convertible Debentures (NCDs) issued through a Scheme of Arrangement. It mandates additional compliance conditions regarding eligibility, tenure, credit rating, and disclosures before the scheme is sanctioned by the NCLT. The document also specifies post-sanction requirements, including the submission of a detailed compliance report to obtain relaxation under Rule 19(7) of SCRR.
Text
In cases where NCRPS/NCDs are issued in lieu of specified securities via a scheme of arrangement for listing, the listed entity shall additionally comply with the requirements stated at Paragraph 5 below, in addition to compliance with SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017.
A listed entity may seek listing of NCRPS/NCDs issued pursuant to a scheme of arrangement only if it is part of such scheme and NCRPS/NCDs are issued to holders of specified securities of such listed entity; NCRPS/NCDs allotted to other investors are not eligible for listing.
The minimum tenure of the NCRPS/NCDs shall be one year.
The NCRPS/NCDs have been assigned minimum such credit rating, if any, specified for public issue of NCRPS under SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 or for public issue of NCDs in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008, as the case may be by a credit rating agency registered with the Board.
The Valuation Report referred in Para (I)(A)(4) of Annexure I of SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017, shall also include valuation of the underlying NCRPS/ NCDs to be issued pursuant to the scheme of arrangement.
The following should be clearly disclosed in Draft Scheme of Arrangement: Face Value & Price, Dividend/Coupon terms, Credit Rating, Tenure/Maturity, Redemption terms, Other embedded features, Other terms of instruments, and Any other information/details pertinent for the investors.
The captioned issue of NCRPS/NCDs shall be in compliance with all the applicable provisions of the Companies Act, 2013 including the provisions related to creation and maintenance of Capital Redemption Reserve/Debenture Redemption Reserve.
All such NCRPS/NCDs shall be issued in dematerialised form only.
In case of NCDs, the issuer has appointed/ shall appoint Debenture Trustee in compliance with SEBI (Issue and Listing of Debt Securities) Regulations, 2008 and Companies Act, 2013.
In case of NCDs, the issuer has created/ shall create an appropriate charge or security, wherever applicable, in compliance with SEBI (Issue and Listing of Debt Securities) Regulations, 2008 and Companies Act, 2013.
All the provisions of SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 and SEBI (Issue and Listing of Debt Securities) Regulations, 2008 have been/ shall be complied with except the provisions related to making a public issue, or making a private placement, or filing of offer document, etc.
The application for relaxation under Sub-rule (7) of rule 19 of SCRR for listing of NCRPS/NCDs shall include a detailed Compliance Report as per the format specified in Annexure I, duly certified by the Company Secretary and the Managing Director, confirming compliance of the Scheme of Arrangement with the provisions of this Circular, SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017, as amended from time to time and with various regulatory requirements specified for schemes of arrangement.
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Source: SecMarx — Listing of Non-Convertible Redeemable Preference Shares (NCRPS) / Non-Convertible Debentures (NCDs) through a Scheme of Arrangement. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.