ISSUE OF DEBT SECURITIES BY PRIVATE & UNLISTED COMPANY

• Identify the person to whom you will issue Debentures. Prepare the list of such persons to whom offer to subscribe debenture will give. Prepare Draft offer letter under PAS-4.
• Issue Notice of Board Meeting to all the directors of Company at least 7 days before the date of Board Meeting. Attach Agenda, Notes to Agenda and draft resolution of Board Meeting along with Notice. Approach the Debenture trustee and obtain the consent of the Debenture Trustee.
• Approve the list of such persons to whom offer for subscription will be given(4) Pass Board Resolution for following purposes :
  • Approval of offer letter;
  • To increase borrowing limit of the Company subject to approval of the Shareholder in General Meeting;
  • Issue the Notice of General Meeting along with explanatory statement. (According to SS-2);
  • Authorize a Company Secretary or director of Company to issue notice of General Meeting;
  • Take note of valuation report.
  • Open Separate Bank Account for allotment of debentures.
  • Appointment of debenture trustee, if required.
• Hold Extra Ordinary General Meeting and pass special resolution for issue of debentures and to increase the borrowing limit of the Company to issue Debentures.
• Offer letter shall be accompanied by an application form serially numbered and addressed specifically to the person to whom the offer is made. Offer Letter sent either in writing or electronic mode. Issue offer letter within 30 days of General Meeting/recording the name of such person. Offer letter should mention the name of the Debenture Trustee, if appointed.
• File MGT-14 with Registrar within 30 days of passing of Special Resolution. Attachments: Notice of General Meeting along with Explanatory Statement, Certified True copy of Special Resolution and Minutes of General Meeting (No need to file this MGT-14 in case of Private Limited Company)
• Open a Separate Bank Account for debentures and File GNL-2 with Registrar within 30 days of circulation of offer letter.
• Hold the Board Meeting and Present List of Allottees before the Meeting. Pass Board Resolution for allotment of Debentures (within 60 days of receiving of money).
• Issue of Debentures Certificate in same Meeting and authorize two directors and a person to sign Debentures certificate.
• Enter into Debenture Trust deed (SH-12), if required.
• File CHG-9 and File PAS-3 with Registrar of Company.
• The entries in the registers maintained under section 88 in form MGT-2 shall be made within 7(Seven) days after the Board of Directors approves the allotment of debentures.
• The Debenture Certificate shall be issue within 6 (Month) months from the date of allotment of Debentures. Stamp Duty settlement as per provisions & rates of Stamp Act of the State (only applicable on Marketable Debenture).

ISSUE OF LISTING OF DEBT SECURITIES BY PUBLIC COMPANY

• File an application to one or more stock exchange for listing of debt securities and obtain in-principle approval
• Obtain Credit Rating including the unaccepted ratings obtained from more than one credit rating agencies shall be disclosed in the offer document
• Enter into an agreement with a depository for dematerialization of the debt securities in accordance with the Depositories Act, 1996 and regulations made there under
• Appoint one or more Merchant banker and lead merchant bankers and create debenture redemption account under Companies Act, 2013
• Draft & Final offer document shall be displayed on websites of stock exchange and shall be available for download in PDF/HTML formats
• Make an advertisement in one English national daily newspaper and one Hindi national daily newspaper with wide circulation on or before the issue opening date
• Issuer shall decide the price and amount of Minimum subscription of debt securities in consultation with the lead merchant banker and disclose the same in the offer document.
• In case of Non-receipt of minimum subscription, all application monies received in the public issue shall be refunded forthwith to the applicants. In the event, the application monies are refunded beyond 8 days, then such amounts shall be refunded together with interest at such rate which shall not be less than 15% per annum.