December 20, 2022
Summary of the Circulars issued by BSE and NSE on 19/12/2022
Clarification on Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS)
This circular is integrated in our free-to-use website ca2013.com.
SEBI, vide its circular dated 17/11/2022, has laid down procedure on Scheme(s) of Arrangement by entities who have listed their NCDs/NCPRS under LODR Regulations, 2015.
In this connection, BSE and NSE have issued clarifications addressing various aspects towards its implementation. Key highlights of the clarificatory circulars are as follows:
1. Applicability of SEBI’s circular: The circular shall be applicable to the Entity whose Board Meeting approving the Scheme of Arrangement was/is held after 14/11/2022, which was the date of amendment of LODR Regulations to this effect.
2. Report of Complaints/ Comments received by the listed entity on the draft scheme of arrangement: For Listed Entity having their specified securities as well as NCDs/NCRPS listed, the report on Complaints has to be submitted to the Stock Exchanges within 7 days of expiry of 21 days from the date of hosting the draft scheme along with documents on the website of Stock Exchanges and the listed entity.
For Listed Entity having only their NCDs /NCRPS listed, the report has to be submitted to the Stock Exchanges within 7 days of expiry of 10 days from the date of hosting the draft scheme along with documents on the websites of Stock Exchanges and the listed entity.
3) Timelines for submission of Response to Stock Exchange by the listed entities that have listed only NCPRS/NCDs: The entity shall submit their response to queries raised by the Stock Exchange within 7 working days of query being raised, to enable adherence to requirement of “maximum number of days for providing the ‘No-Objection’ Letter to SEBI shall not exceed thirty days from the date of receipt of the draft scheme of arrangement”. It may be noted that submission of incomplete reply will be considered as non-submission.
4) Number of applications: For Listed Entity having their specified securities as well as NCDs/NCRPS listed, a single filing of the draft scheme of arrangement in terms of Regulations 37 and Regulation 59A of SEBI LODR Regulation 2015 shall be submitted under Regulation 37 wherein additional documents, as required for NCDs/NCRPS listed company shall also be attached.
5) Disclosure pertaining to Exit offer to Dissenting NCDs/NCPRS holders: The report issued by the Board of Directors recommending the draft scheme shall also contain their comments on the Exit offer for the dissenting holders of NCDs/ NCRPS, who dissent the proposed scheme of arrangement. Further, if there are provisions related to exit offer, the same shall also be part of the scheme.