Regulation 14 - Escrow account - Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021.

Escrow account 14 . 1 [ (1) The acquirer shall open an interest bearing escrow account with a Scheduled Commercial Bank, not later than seven working days from the date of obtaining the shareholders approval, and deposit therein an amount equivalent to twenty-five percent of the total consideration, calculated as below i. in case delisting is proposed through reverse book building process; the total consideration shall be calculated on the basis of the number of equity shares outstanding with the public shareholders multiplied with the floor price or the indicative price, if any given by the acquirer in terms of sub-regulation (4) of regulation 20 of these regulations; whichever is higher; ii. in case delisting is proposed through the fixed price process; the total consideration shall be calculated on the basis of the number of equity shares outstanding with the public shareholders multiplied with the fixed delisting price offered by the acquirer. ] (2) The acquirer shall enter into a tripartite agreement with the Manager to the offer and the Bank for the purpose of opening the escrow account and shall authorize the Manager to the offer to operate such account as per the provisions of these regulations. 2 [ (3) Before making the detailed public announcement under regulation 15 of these regulations, the acquirer shall deposit in the escrow account, the remaining consideration amount being seventy-five percent of the total consideration amount calculated in terms of sub-regulation (1). ] (4) On determination of the discovered price and making of the public announcement under sub-regulation (4) of regulation 17 of these regulations accepting the discovered price, the acquirer shall forthwith deposit in the escrow account such additional sum as may be sufficient to make up the entire sum due and payable as consideration in respect of equity shares outstanding with the public shareholders. (5) The escrow account shall consist of either the cash deposited with a Scheduled Commercial Bank or a bank guarantee in favour of the Manager to the offer or a combination of both. (6) Where the escrow account consists of a deposit with a Scheduled Commercial Bank, the acquirer shall, while opening the account, authorize the Manager to the offer to make fund transfers through electronic mode or such other mode permitted by the Reserve Bank of India, and to instruct the bank to issue banker s cheques or demand drafts for the amount lying to the credit of the escrow account, for the purpose(s) mentioned in these regulations, and the amount in such account, if any, remaining after full payment of consideration for the equity shares tendered in the delisting offer and those tendered under sub-regulation (1) of regulation 26 of these regulations shall be released to the acquirer. (7) Where the escrow account consists of a bank guarantee, such bank guarantee shall be valid till payments are made in respect of all shares tendered under sub-regulation (1) of regulation 26 of these regulations. (8) In case of failure of the delisting offer, ninety nine percent of the amount lying in the escrow account shall be released to the acquirer within one working day from the date of public announcement of such failure. (9) The remaining one percent amount lying in the escrow account shall be released post return of the shares to the public shareholders or confirmation of revocation of lien marked on their shares by the Manager to the offer as per the timelines provided in these regulations. *************** NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/206 dated 25-09-2024 w.e.f. (For Additional Condition See this Notification ) before it was read as, (1) The acquirer shall open an interest bearing escrow account with a Scheduled Commercial Bank, not later than seven working days from the date of obtaining the shareholders approval, and deposit therein an amount equivalent to twenty five percent of the total consideration, calculated on the basis of the number of equity shares outstanding with the public shareholders multiplied with the floor price or the indicative price, if any given by the acquirer in terms of sub-regulation (4) of regulation 20 of these regulations, whichever is higher. 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/206 dated 25-09-2024 w.e.f. (For Additional Condition See this Notification ) before it was read as, (3) Before making the detailed public announcement under regulation 15 of these regulations, the acquirer shall deposit in the escrow account, the remaining consideration amount being seventy five percent calculated on the basis of the number of equity shares outstanding with the public shareholders multiplied with the floor price or the indicative price, if any given by the acquirer in terms of sub-regulation (4) of regulation 20 of these regulations, whichever is higher.