Disclosures by listed entities of defaults on payment of interest or repayment of principal amount on loans from banks or financial institutions, debt securities etc.

SEBI has, vide circular no. CIR/CFD/CMD/93/2017 dated 4^th August, 2017, issued guidelines for listed entities with respect to making disclosures about defaults on payment or repayment of principal amount on loans from banks or financial institutions, debt securities.

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations) material events / information are to be disclosed on the stock exchanges by listed entities including specific disclosures with regard to delay / default in payment of interest / principal on debt securities. Presently, this disclosure requirement is applicable in respect of delays / defaults in case of listed Non-Convertible Debentures, listed Non-Convertible Redeemable Preference Shares, Foreign Currency Convertible Bonds (FCCBs) only. However, similar disclosures in cases of delays / defaults were not prescribed for loans from banks and financial institutions.

Now SEBI has stated in this circular that disclosures shall be made to stock exchanges when a listed entity has defaulted in payment of interest or instalment obligations on debt securities, Medium Term Notes (MTNs), Foreign Currency Convertible Bonds (FCCBs), loans from banks and financial institutions, External Commercial Borrowings (ECBs).

This SEBI circular will be applicable to all the listed entities who have listed equity and convertible securities, non-convertible debt securities and non-convertible and redeemable preference shares.

Disclosures shall be made within one working day from the date of default at the first instance of default in the format specified. Listed entities are required to provide all the disclosures also to Credit Rating Agencies also.

Also in the above mentioned circular, SEBI has provided a list of disclosures which the listed entities are required to provide.

The list can be downloaded from the following link:

http://www.sebi.gov.in/legal/circulars/aug-2017/disclosures-by-listed-entities-of-defaults-on-payment-of-interest-repayment-of-principal-amount-on-loans-from-banks-financial-institutions-debt-securities-etc_35538.html

This circular shall be effective from 1^st October, 2017.