Key
Highlights:
§ from certain provisions of the SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2018 in respect of Rights
Issue
§ These temporary relaxations are applicable for
Right Issues that open on or before March 31, 2021
§ The relaxations mentioned in this circular
are not applicable for issuance of warrants
§ come into force with immediate effect
·
Overview
Securities and
Exchange Board of India (SEBI) vide notification / Circular No. SEBI/HO/CFD/CIR/CFD/DIL/67/2020
issued and publish dated 21st
April, 2020, has published - Relaxations
from certain provisions of the SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2018 in respect of Rights Issue”
The Circular
is issued to :
-
All Recognized Stock Exchanges
-
All Registered Merchant Bankers
In view of the situation arising due to COVID-19 pandemic and
extended lockdown period, request has been made from industry bodies and market
participants for easing of conditions relating to raising of funds from the
securities market.
Ø It has been decided to introduce temporary
relaxations in the provisions related to Rights Issues as contained in the SEBI
(Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR
Regulations) as follows:
Ø
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Relaxation Particulars
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Relaxations
|
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Relaxations
with respect to the eligibility conditions related to Fast Track Rights
Issues:
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a) Unless otherwise specified, nothing
contained in sub-regulations (1), (2), (4) and (5) of the Regulation 71 shall
apply if the issuer satisfies the conditions mentioned under Regulation 99 of
ICDR Regulations for making a rights issue through the fast track route.
b)
Certain temporary relaxations with respect to Regulation 99 of ICDR Regulations
are extended as follows:
·
In
regulation 99(a) the words ‘three years’ shall be read as ‘eighteen months’
·
In
regulation 99(c) the words ‘two hundred and fifty crores’ shall be read as
‘one hundred crores’
·
In
regulation 99(f) and its proviso the words ‘three years’ shall be read as
‘eighteen months’
·
(iv)
Regulation 99(h) shall be read as under: “no show-cause notices, excluding
under adjudication proceedings, have been issued by the Board and pending
against the issuer or its promoters or whole-time directors as on the
reference date;
In cases where against
the issuer or its promoters/ directors/ group companies:
-
a
show cause notice(s) has been issued by the Board in an adjudication
proceeding or
-
prosecution
proceedings have been initiated by the Board;
necessary disclosures
in respect of such action (s) along-with its potential adverse impact on the
issuer shall be made in the letter of offer.
· Regulation 99 (i) shall be read as
“the issuer or promoter or promoter group or director of the issuer has
fulfilled the settlement terms or adhered to directions of the settlement
order(s) in cases where it has settled any alleged violation of securities
laws through the consent or settlement mechanism with the Board”
· In regulation 99 (j) the words
‘three years’ shall be read as ‘eighteen months’
·
Regulation
99 (m) shall be read as “For audit qualifications, if any, in respect of any
of the financial years for which accounts are disclosed in the letter of
offer, the issuer shall provide the restated financial statements adjusting
for the impact of the audit qualifications. Further, that for the
qualifications wherein impact on the financials cannot be ascertained the
same shall be disclosed appropriately in the letter of offer."
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Relaxation with respect
to Minimum Subscription:
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Regulation
86(1) shall be read as under-
The
minimum subscription to be received in the issue shall be at least seventy- five
per cent of the offer through the offer document. Provided that if the
issue is subscribed between 75% to 90%, issue will be considered successful
subject to the condition that out of the funds raised at least 75% of the
issue size shall be utilized for the objects of the issue other than general
corporate purpose
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Relaxation with respect
to the minimum threshold required for not filing draft
letter of offer with
SEBI:
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In
regulation 3(b), proviso to regulation 3 and in regulation 60, the words ‘ten
crores’ shall be read as ‘twenty-five crores’.
The
eligibility and general conditions as specified in Regulation 61 & 62
respectively shall continue to apply.
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Source:
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SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THIS INFORMATION.
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