India’s SEBI may ease norms for takeover of ailing firms
Market regulator Securities and Exchange Board of India may amend regulations to help insolvency of 12 defaulters listed by Reserve Bank of India
After India’s central bank initiated insolvency proceedings against 12 large borrowers, many of whom are also listed in stock exchanges, market regulator Securities and Exchange Board of India (SEBI) is expected to amend some existing regulations related to takeovers.
SEBI is planning to reduce the timeline for completion of takeover to 30 days from six months for acquirers in the case of insolvency proceedings. Price discovery and disclosure-related rules in such takeovers are also expected to be relaxed, reports Business Standard.
The market regulator is considering doing away with the price discovery formula used to arrive at the open offer price for such acquisitions. The price agreed upon by all stakeholders, including lenders and investors, would be the final price for acquisition. However, this could require an approval from the National Companies Law Tribunal (NCLT) where insolvency proceedings are pending.
Meanwhile, lenders of ailing steel firm Monnet Ispat, which figures among 12 top defaulters, gave the mandate to the State Bank of India, the lead lender, to move an application before the NCLT under the Insolvency and Bankruptcy Code.
Debt-ridden auto components maker Amtek Auto, which also figures in RBI’s top defaulters’ list, has received expressions of interest from 21 investors. The company is looking for stake sale to bring down its debt of Rs 130 billion (US$ 2.01 billion), reports Business Standard.