Foreign Currency Exchangeable Bonds Scheme 2008 introduced

Mumbai, Sep 23 (UNI) Indian Companies will soon have a new route of investment with the introduction of Foreign Currency Exchangeable Bonds Scheme (FCEB) 2008 operationalised by the Reserve Bank of India with immediate effect today.

The Union Finance Ministry had notified the scheme in February this year.

FCEB 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.

RBI said 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 FCEB. 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 (FCCB) or External Commercial Borrowings (ECB).

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