Sebi eases norms to acquire stressed companies

Mumbai: Market regulator Sebi has decided to make make it easier for strategic investors to acquire shares in distressed firms under the restructuring schemes.

The board of Sebi on Wednesday decided to amend the Sebi takeover code and the preferential issue requirements under Sebi (Issuance of Capital and Disclosure Requirements) Regulation 2009 that would enable a strategic investor to acquire shares in a distressed firm without giving open offer to public shareholders.

However to safeguard the interest of minority shareholders, the regulator said such relaxation would be subject to certain conditions like approval by the shareholders of the companies by special resolution.

Additionally, there will be a lock-in period of minimum three years for the new investor or promoter who acquires shares in a distressed firm under such scheme.  

“It has been represented to Sebi that where the lenders have acquired shares and propose to divest the same to a new investor, they are facing difficulties as the new investor would need to make a mandatory open offer which would reduce the funds available for investment in the company. Hence, they have requested for exemptions to these investors,” Sebi said.

It added that these relaxations would also be extended to the lenders under other restructuring schemes undertaken in accordance with guidelines issued by RBI.

RBI’s internal advisory committee has already prepared a list of large defaulters for speedy resolution under the Insolvency and Bankruptcy Code.