Companies may be allowed to roll over debentures, says DCA
Our Corporate Bureau
23 June 2003
New Delhi: The Department of Company Affairs (DCA) has agreed in principle to the idea of allowing companies, especially unlisted ones, to roll over their debentures as long as 75 per cent of the debenture-holders give their consent to such a proposal through the postal ballot.
The rollover option, with varying conditions for companies in default and those not in default, is likely to be allowed for all companies including the unlisted companies that have defaulted in the repayment of the debenture amount.
The DCA, which is now reviewing the existing regulatory framework on debentures and debenture trustees under the Companies Act, is also in favour of allowing the debenture trustee to appoint a nominee on the board of an issuer company in the event of a default in payment of interest to debenture-holders or default in redemption of debentures.