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TMI Blog'Issue of Foreign Currency Exchangeable Bonds Scheme, 2008'X X X X Extracts X X X X X X X X Extracts X X X X ..... litate the issue of FCEB by Indian companies. 3. "Foreign Currency Exchangeable Bond" means a bond expressed in foreign currency, the principal and interest in respect of which is payable in foreign currency, issued by an Issuing Company and subscribed to by a person who is a resident outside India, in foreign currency and exchangeable into equity share of another company, to be called the Offered Company, in any manner, either wholly, or partly or on the basis of any equity related warrants attached to debt instruments. The FCEB may be denominated in any freely convertible foreign currency. 4. Eligible Issuer : The Issuing Company shall be part of the promoter group of the Offered Company and shall hold the equity share/s being offered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiving investments out of the FCEB proceeds may utilise the amount in accordance with end-uses prescribed under the ECB policy. 10. End-uses not permitted : The promoter group company receiving such investments will not be permitted to utilise the proceeds for investments in the capital market or in real estate in India. 11. All-in-cost : The rate of interest payable on FCEB and the issue expenses incurred in foreign currency shall be within the all-in-cost ceiling as specified by Reserve Bank under the ECB policy. 12. Pricing of FCEB: At the time of issuance of FCEB the exchange price of the offered listed equity shares shall not be less than the higher of the following two: (i) The average of the weekly high and low of the closi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 dated May 3, 2000 as amended from time to time and Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 dated July 7, 2004) as amended from time to time, are being issued separately. 18. Authorised Dealer Category I banks may bring the contents of this circular to the notice of their constituents and customers. 19. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, Salim Gangadharan Chief General Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oup" has the same meaning as defined in the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000. 3. Eligibility Conditions and subscription of Foreign Currency Exchangeable Bonds - (1) The Issuing Company shall be part of the promoter group of the Offered Company and shall hold the equity share/s being offered at the time of issuance of Foreign Currency Exchangeable Bond. (2) The Offered Company shall be a listed company which is engaged in a sector eligible to receive Foreign Direct Investment and eligible to issue or avail of Foreign Currency Convertible Bond or External Commercial Borrowings. (3) An Indian Company, which is not eligible to raise funds from the Indian securities market, includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries abroad. 5. Operational Procedure - (1) Prior approval of the Reserve Bank of India shall be required for issuance of Foreign Currency Exchangeable Bond. (2) The Foreign Currency Exchangeable Bond may be denominated in any freely convertible foreign currency. 6. Pricing and Maturity - (1) The rate of interest payable on Foreign Currency Exchangeable Bond and the issue expenses incurred in foreign currency shall be within the all in cost ceiling as specified by Reserve Bank of India under the External Commercial Borrowings policy. (2) At the time of issuance of Foreign Currency Exchangeable Bond the exchange price of the offered listed equity shares shall not be less than the higher of the following two :‑ (i) the average of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Securities and Exchange Board of India Act, Rules, Regulations or Guidelines with respect to disclosures of their shareholding in the Offered Company. (3) The Issuing Company shall not transfer, mortgage or offer as collateral or trade in the offered shares under Foreign Currency Exchangeable Bond from the date of issuance of the Foreign Currency Exchangeable Bond till the date of exchange or redemption. Further, the Issuing Company shall keep the offered shares under Foreign Currency Exchangeable Bond free from all encumbrances from the date of issuance of the Foreign Currency Exchangeable Bond till the date of exchange or redemption. 8. Retention and deployment of proceeds of Foreign Currency Exchangeable Bond:- The proceeds of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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