August 16, 2017
SEBI has recently amended Securities and Exchange Board of India Regulations, 2011
SEBI has recently amended Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”). Vide the said amendment SEBI has made certain changes in Regulation 10 of the Takeover Regulations which provides for general exemptions. Regulation 10 of the Takeover Regulations provides for certain acquisitions which shall be exempt from the obligation to make an open offer under Regulation 3 and Regulation 4 subject to fulfilment of the conditions stipulated thereunder.
In addition to the existing exemptions, SEBI vide the said amendment has added few more exemptions. SEBI has now exempted acquisition pursuant to a resolution plan approved under section 31 of the Insolvency and Bankruptcy Code, 2016 from the obligation to make an open offer under Regulation 3 and Regulation 4.
Further, Clause (i) of Regulation 10(1) of the Takeover Regulations has been substituted so as to now exempt acquisition of shares by the lenders pursuant to conversion of their debt as part of a debt restructuring scheme implemented in accordance with the guidelines specified by the Reserve Bank of India, from the obligation to make an open offer. This is subject to the stipulation that conditions specified under sub-regulation (5) of regulation 70 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 are complied with.
It should be noted that earlier the said Clause (i) of Regulation 10(1) exempted acquisition of equity shares by the consortium of banks, financial institutions and other secured lenders pursuant to conversion of their debt as part of the Strategic Debt Restructuring Scheme in accordance with the guidelines specified by the Reserve Bank of India.
Furthermore, another exemption has been added which provides that acquisition of shares by the person(s), by way of allotment by the target company or purchase from the lenders at the time of lenders selling their shareholding or enforcing change in ownership in favour of such person(s), pursuant to a debt restructuring scheme implemented in accordance with the guidelines specified by the Reserve Bank of India shall be exempted from the obligation to make an open offer. The said clause provides various compliances which needs to be complied with in order to avail the said exemption.
The relevant circular is attached herewith for your reference.
For any details and clarifications, please feel free to write to:
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