The board of market regulator Securities and Exchange Board of India, on Wednesday eased takeover regulations to facilitate the restructuring of stressed assets.
The regulator eased regulations for listed companies, allowing shareholders and lenders to divest their equity shareholding acquired through the conversion of debt into equity to investors, without the requirement of a mandatory open offer.
Currently, relaxations are available to lenders for undertaking restructuring of the company under the Strategic Debt Restructuring (SDR) norms of the Reserve Bank of India. Lenders are exempted from the preferential issue guidelines – SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 – and from the open offer regulations under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
The board of SEBI decided to extend the relaxations to new investors acquiring shares from lenders subject to approval of the shareholders of the company through a special resolution and lock-in of their shareholdings for a minimum period of three years.
The market regulators also extended this exemption to other restructurings undertaken by lenders in accordance with RBI guidelines.
The market regulator also allowed exemption from open offer guidelines, for all cases that are approved by the National Company Law Tribunal, under the Insolvency and Bankruptcy Code, 2016.
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