Amendment to Foreign Currency Convertible Bonds Scheme

New Delhi, June 28 (UNI) The government today liberalised the Foreign Currency Convertible Bonds and Ordinary Shares Scheme allowing unlisted Indian companies to sponsor an issue of ADRs and GDRs with an overseas depositry against shares held by its shareholders.

This, however, would be subject the following conditions; (i) Such a facility would be available pari-passu to all categories of shareholders of the company whose shares are being sold in the ADR/GDR market overseas; (ii) Unlisted companies which had issued FCCBs, ADRs/GDRs prior to August 31, 2005 and are not making profit may be permitted to sponsor issues against existing shares held by its shareholders and will be permitted to comply with listing conditions on the domestic stock exchanges within three years of having started making profit.

(iii) Unlisted companies which have not issued FCCBs, ADRs/GDRs prior to August 31, 2005 would require prior or simultaneous listing in the domestic stock exchanges for issuing FCCBs, ADRs/GDRs or sponsor such issues against existing shares under the scheme; and (iv) Such issues would need to conform to the FDI policy and other mandatory statutory requirements. The provisions of paragraph (4B) of Schedule I to Foreign Exchange The Scheme was notified by the government on November 12, 1993.

Revisions and modifications in the operative guidelines of the Scheme have been made from time to time. The scheme was further liberalised today by the Finance Ministry.

UNI GS RA VC1832