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Corporate debt owed to banks and the stock change rules notified

Author: Chandra Shekhar
by Chandra Shekhar
Posted: May 08, 2015

Sebi bank debt deal with banks to help companies repay debt stock to such a change in rules has been notified. The move is likely to pick cases of debt restructuring. SEBI in case of change in the debt stock of shares pricing formula is changed. The bank does not repay the debt, can take a greater role in the running of companies and acquired majority stake management can control. Rs about three lakh crore in public sector banks in total have been affected by debt recovery.

Of these, 95 122 crore on 30 defaulters are outstanding. Kingfisher loans as banks in some cases blocking: NPA: converted into equity, but are very difficult to process due to regulatory and legal costs. SEBI said that the debt restructuring plan strategy under "consortium of banks, financial institutions and other lenders guaranteed by changing the arrangement of the outstanding debt into shares of the Reserve Bank's guidelines.

Bank loans in the event of non-performing assets still in stock can change, but in such cases some regulatory issues involving troubled listed companies which were standing. SEBI issued new pricing formula is designed to simplify the process. With changes in pricing parameters, there are some protective measures, which must be based on fair value. Debt can be converted into equity only if the banks in the respective company to be acquired at least 51 per cent. In terms of price discounts may be under reasonable price fixed formula and price cannot be less than the nominal value of shares. Changes with respect to the fixed price will be required proof of two independent Aklnktaon.

On the sale of shares allotted for a period of one year from the date of approval of the business will stop. Consortium of banks and financial institutions over the term of its stake before the ban can be transferred to a unit in that case will continue for the duration of the ban. RBI's proposed strategic plan as part of debt restructuring on the debt is converted into shares if the other requirements would apply. Earlier in March Sebi board also troubled companies convert debt into equity was approved a proposal to liberalize the criteria.

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Author: Chandra Shekhar

Chandra Shekhar


Member since: Dec 23, 2013
Published articles: 57

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