The Securities and Exchange Board of India (‘SEBI’) has, by way of its Circulars dated November 16, 2021 and November 18, 2021, amended certain provisions of the Master Circular dated December 22, 2020, on schemes of arrangement by listed entities (‘Master Circular’). These amendments will apply to all schemes filed with stock exchanges from November 16, 2021. The Master Circular has been updated with the above amendments, and the updated version has been issued on November 23, 2021.

Amongst the key amendments, SEBI has asked the listed entities to submit additional documents while seeking no objection from stock exchanges to the draft Scheme which include undertaking on no material events impacting the valuation, declaration of past defaults of listed debt obligations, no objection certificates (‘NOC’) from the lending scheduled commercial banks, financial institutions, and debenture trustees. The requisite documents (other than the NOC) will need to be submitted within 15 working days of the Board meeting approving the draft Scheme in light of the requirements set out in standard operating procedure dated November 1, 2021, issued by BSE Limited. Further, if this timeline is not adhered to, the listed entity will need to obtain fresh approvals from its Board considering fresh financial statements, valuation report, etc. As regards the NOC, SEBI has, by way its Circular dated January 3, 2022, provided that the NOC will need to be submitted before the receipt of no objection letter from stock exchanges to the draft Scheme. The NOC requirement is in addition to the already existing requirement under the Companies Act, 2013, for obtaining approval of all classes of creditors of the company to the scheme (majority in number representing 3/4th in value) voting in a meeting, or where such meetings are dispensed by National Company Law Tribunal upon submission of consent affidavits from creditors (at least 90% in value).