Sebi provides relaxations for insolvent companies
Sebi has relaxed requirements to comply with delisting norms for companies facing insolvency proceedings provided the resolution plan lays down the procedure for delisting that particular entity from the exchanges. The move is expected to provide succour for various listed companies that have been referred for resolution under the Insolvency and Bankruptcy Code (IBC). More than 750 entities, including many listed firms, are facing insolvency proceedings.
The exemption would be subject to conditions that the resolution plan “lays down any specific procedure to complete the delisting of such shares” or that the plans provides an exit option to the existing public share holders at a specified price.
Certain relaxations have also been extended to insolvent entities with respect to regulations pertaining to substantial acquisition of shares and takeovers as well as issue of capital and disclosure requirements, according to separate notifications.