Substantial Acquisition of Shares and Takeovers) Regulations 2011

SEBI CONSULTATION PAPER FOR LISTED COMPANIES WITH STRESSED ASSETS - CURE FOR THE SICK COULD BE VACCINE FOR ALL 

With the slowdown in the economy and unprecedented business disruption due to Covid 19, several Indian listed companies, which were already heavily leveraged, will soon be looking at avenues for further funding to meet working capital requirements and liquidity challenges. Given the current regulatory regime surrounding raising of equity capital, it is possible that some of the over-leveraged ones may become insolvent. With a view to facilitate fund raising by such listed companies that have stressed assets, the market regulator has come up with a consultation paper, that provides certain procedural relaxations to the SEBI (Issue of Capital and Disclosures Requirements) Regulations, 2018 (ICDR Regulations) and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations).
Continue Reading SEBI Consultation Paper For Listed Companies With Stressed Assets – Cure For The Sick Could Be Vaccine For All

 Regulation 22(2A) of SEBI Takeover Regulations

A question that comes up regularly in the context of an underlying secondary transaction that triggers an open offer is whether such a transaction can be closed on the stock exchange? This is due to reservations expressed by the Securities Exchange Board of India (SEBI) in relation to the interpretation of certain provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations).

This has led to unintended consequences, which cast a doubt on the legality of the on-market closure of underlying share purchase transactions. The shadow of this doubt unfortunately extends to on-market closures even if the on-market closure follows the completion of the open-offer process. In this blog post[1] we would like to clarify that the on-market closure of underlying transactions is not contrary to Takeover Regulations and the provisions of Takeover Regulations are not subject to multiple interpretations on this aspect.[2]
Continue Reading Regulation 22(2A) of SEBI Takeover Regulations : Is On-Market Closure of Underlying Transactions Prohibited?