Financial Daily from THE HINDU group of publications
Saturday, Oct 02, 2004
Financial Daily from THE HINDU group of publications Saturday, Oct 02, 2004 |
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Corporate
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Overseas Borrowings Markets - Stocks Money & Banking - RBI & Other Central Banks Corporates allowed to convert ECBs into equity Our Bureau
Mumbai , Oct. 1 CORPORATES, whose activities are covered under the automatic route for FDI, would now be allowed to convert their external commercial borrowings (ECBs) into equity. Further, the foreign equity after the conversion of debt into equity should be within the sectoral cap, if any and the pricing of the shares is as per SEBI guidelines, according to an RBI press release. In case of unlisted companies, guidelines of the erstwhile CCI would prevail, clarified the circular. The conversion facility is available for all ECBs availed either with the general or specific permission of RBI. "This would also be applicable to ECBs irrespective of whether they are due for repayment or not, as well as secured or unsecured loans availed from non-resident collaborators," said the release. However, import payables that are deemed ECBs would not be eligible for conversion into equity or preference shares, according to the release.
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