SEBI issued Circular on Friday and is applicable to Non-convertible Debt securities (NCDs) and Non-convertible Redeemable Preference shares (NCRPS).

SEBI has come out with guidelines for debt listed entities which are intending to enter into scheme of arrangement has to obtain NOC from stock exchange under the new guidelines, before scheme can be filed with NCLT.

SEBI issued Circular on Friday and is applicable to Non-convertible Debt securities (NCDs) and Non-convertible Redeemable Preference shares (NCRPS).

Entities that are debt-listed and have raised funds through a public offering or private placement of NCDs/NCRPS must comply with the new framework before filing the scheme of arrangement with the National Company Law Tribunal (NCLT).

In the draft filing for scheme of arrangement, the listed entity must disclose information such as face value, dividend/coupon, credit rating, redemption, safeguards for holder protection, exit offer, latest audited financials, fairness report, and so on.

All listed entities must provide a valuation report from a Registered Valuer. In the event of a scheme of arrangement between listed and unlisted entities, the listed entity is required to submit a valuation report from a Registered Valuer on behalf of the unlisted entity.

An auditor’s certificate certifying the resultant entity’s payment/repayment capability must be filed. The auditor must certify that the scheme’s accounting treatment complies with all of the Accounting Standards specified by the Central Government under Section 133 of the Companies Act, 2013.

Before filing the draft scheme with the designated Stock Exchange, all listed entities must ensure that all dues and/or fines/penalties imposed by SEBI, Stock Exchange(s), and Depositories have been paid/ settled.

The listed entity must also disclose the Stock Exchange(s)’ No-Objection Letter on its website within 24 hours of receiving it.

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