Revamped Overseas Investment Regime (Part II) – Overseas Debt Investments Rationalized

  • Control threshold introduced for offshore debt – a shift of focus towards strategic growth
  • Offshore private credit and special situation funding now permitted
  • Debenture trustee’s introduced to encourage offshore funding to an Indian entity…

    Private Credit: Supreme Court holds that ownership of pledged shares remains with pledgor despite transfer to pledgee 

    • SC overrules a series of prior rulings which held that pledgee becomes the owner of pledged shares upon invocation.
    • SC holds that even though pledgee is recorded as beneficial owner upon invocation, pledgee only receives ‘special rights’ and not ‘ownership’ over pledged shares.
    • The term ‘actual sale’ means sale to a third party…

      Threat of valuation litigation in Public M&A – Carlyle-PNB Effect! 

      • SEBI floor price prescription in case of fund raises should not automatically dislodge directors’ duty to exercise independent judgment and maximise shareholder value
      • Target boards to proactively consider appointing an independent banker and running a robust auction process for capital raises…

        SEBI Introduces Special Situation Funds: Opens doors for acquisition of stressed loans without ARC intermediation

        • Special Situation Funds (SSF) have been launched Category – 1 AIF for sophisticated investors
        • Offshore investors no longer have to rely on an Asset Reconstruction Company /
          Asset Reconstruction Trust framework to invest in stressed assets…