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The amendment to the “Issue of Foreign Currency Convertible Bonds and Ordinary Share (Through Depositary Receipt Mechanism) Scheme, 1993,” was issued on 31st August, 2005. There have been requests from Industry that in order to remove hardship to Indian companies that have taken verifiable “effective steps,” before 31st August, 2005 and incurred costs, the amendment of 31st August, 2005 should not be applicable.
This request has been examined in Government and it has been decided that the companies issuing Global Depositary Receipts/Foreign Currency Convertible Bonds that have taken verifiable “effective steps,” before 31st August, 2005 would be exempt from the requirement of prior or simultaneous listing in case of unlisted companies and of the revised pricing guidelines in case of listed companies provided these companies complete their issues latest by 31st December, 2005.
“Effective steps,” for the above purpose, will mean the following:
(a) That the company has completed due diligence and filed offering circular in the overseas exchange(s); or
(b) That approval of overseas exchange(s) has been obtained; or
(c) That the payment of listing fees is made; or
(d) That the approval of the Reserve Bank of India, where applicable, for meeting issue related expenses has been obtained.
It is clarified that private placements of issues, where no offering circular was placed before the overseas exchange(s), would not qualify for “effective steps.” However, all other conditions contained in the amendment dated 31st August, 2005 including that for (i) eligibility of issuer and (ii) eligibility of subscriber would continue to be applicable to all companies including those that have taken “effective steps” as detailed in preceding paragraphs before 31st August, 2005.
BSC/BY/GN-334/05
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