Rollover of NCDs PCDs By a Listed Company Being in Default

The non-convertible portion of PCDs/FCDs by listed companies exceeding Rs 10 lakh can be rolled over without change in the interest rate subject to Section III of the Companies A/1 and the following namely, (a) a resolution by postal of at least 75 per cent of die debenture-holders. (b) along with the notice for passing the resolution, send to the debenture-holders auditor’s certificate on the cash flow of the company with comments on its liquidity position. (c) redemption of debentures of all the dissenting debenture-holders, (d) a decision of the debenture trustee about the creation of fresh security and execution of fresh trust deed in respect debentures to be rolled over.

In the case of conversion of PCDs/FCDs into equity capital: (i) if the convertible position of any instrument such as PCDs, FCDs and so on, issued by a listed company, value of which exceeds Rs 50 lakh, and whose conversion price was not fixed at the time of issue, holders of such instruments should be given a compulsory option of not converting into equity capital: (ii) conversion should be done only in CDSCS where instrument-holders have sent their positive consent and not on the oasis of the non-receipt of their negative reply. Where issues are made and cap price with justification, thereon, is fixed beforehand with respect to any instruments, by the issuer and disclosed to the investor before issue, it would not be necessary to give the option to the instrument-holders for converting the instruments to equity capital within the cap price; (iii) in case where an option is to be given to such instrument-holders and any instrument holder does not exercise the option to convert the debentures into equity at a price determined in the general meeting of the shareholders, the company should that part of the debenture at a price not less than its face value, within one month from the last date by which the option is to be exercised; (iv) the provision of the sub-clause (iii) above would not apply if such redemption is to be made in accordance with the terms of the issue originally stated.

Companies may issue unsecured/sc bordered debt instrument obligations (which are not public deposits as per the provisions of Section 8-1A of the Companies Act/other notifications, guidelines, circulars and so on issued, (there authorities) to be subscribed by QIBs/other investors who have given their positive consent of subscribing to them.

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