Can any friend advice me on the following: A Listed Company has taken some unsecured loan from a related private limited Company. Now the listed Company intends to issue non-redeemable fully convertible preference shares to the Private Company against the loan amount. The authorised capital of the listed company is 5 cr (all equity) & paid up is 4.51 cr. So, what is procedure considering the provisions of the Companies Act, SEBI(DIP) & SEBI (ICDR). The loan amount is around 4 cr.
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Preferential Allotment
Replies (1)
Dear Vikas,
First check Memorandum and increased authorised capital accordingly.
For issue of non-redeemable fully convertible preference shares chapter VII of ICDR guideliness will be applicable.
Imp factors in ICDR;
-
Pricing for issue
-
Lock In will be for one year if alloted to non-promoters
-
Quantum of allotment subject to SEBI SAST Regulation
Also need to check whether there is any restriction in loan agreement for such conversion.
Rest procedures as specified under Companies Acts and rules therein will be applicable.
Regards
Jaideep Pandya
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