Description

Proposed material changes to 3,828 rated, listed, secured, redeemable, non-convertible debentures aggregating up to INR 382.8 crores of Steel Exchange India Limited.

Summary

BSE has disclosed proposed material changes to 3,828 existing rated, listed, secured, redeemable, non-convertible debentures of Steel Exchange India Limited aggregating up to INR 382,80,00,000 (INR 382.8 crores). The changes primarily relate to interpretations, debenture trustee powers, and introduction of new defined terms related to existing creditors and financial indebtedness.

Key Points

  • Total debentures affected: 3,828 secured, redeemable, non-convertible debentures
  • Aggregate value: INR 382.8 crores
  • Changes include modifications to debenture trustee determination powers
  • Introduction of “Relevant Instructions” replacing “Majority Resolution” for trustee actions
  • Deletion of Material Adverse Effect determination clause by debenture trustee
  • New definitions added for Existing Creditors, Existing Finance Documents, Existing Financial Indebtedness, Existing Investors, and Existing Term Lender
  • Common Security Trustee Agreement provisions to prevail in case of inconsistency with transaction documents
  • Existing Term Lender identified as Capri Global Capital Limited (CIN: L65921MH1994PLC173469)

Regulatory Changes

Interpretation Clause Modifications:

  1. Materiality Determinations: Changed from “Debenture Trustee acting on instructions of Debenture Holders pursuant to a Majority Resolution” to “Debenture Trustee acting on Relevant Instructions”

  2. Material Adverse Effect Clause: Deleted the clause giving debenture trustee exclusive rights to determine Material Adverse Effect based on debenture holder instructions

  3. Trustee Action Framework: New provision inserted specifying that debenture trustee actions, consents, and discretion require “Relevant Instructions” unless modified by Common Security Trustee Agreement. Common Security Trustee Agreement provisions prevail in case of inconsistency.

  4. New Definitions Added:

    • Existing Creditor(s): Financial creditors to obligors as per Schedule XIV
    • Existing Finance Documents: Financing and security documents with existing creditors
    • Existing Financial Indebtedness: Outstanding amounts under existing finance documents
    • Existing Investors: Debenture holders prior to Transfer Date
    • Existing Term Lender: Capri Global Capital Limited

Compliance Requirements

  • Debenture holders should review the proposed material changes to understand impact on their rights
  • Trustee actions will now require “Relevant Instructions” instead of “Majority Resolution”
  • Common Security Trustee Agreement framework will govern inter-se relationships between term lenders and debenture trustee
  • Security enforcement and acceleration procedures modified to align with Common Security Trustee Agreement
  • Debenture holders should review Schedule XIV for details of existing financial indebtedness

Important Dates

  • Circular Date: October 20, 2025
  • No specific implementation or effective dates mentioned in the provided content

Impact Assessment

High Impact on Debenture Holders:

  • Significant changes to governance and decision-making framework for debenture trustee actions
  • Shift from “Majority Resolution” to “Relevant Instructions” may alter voting and consent mechanisms
  • Removal of exclusive Material Adverse Effect determination rights reduces debenture holder influence
  • Introduction of Common Security Trustee Agreement framework creates priority/coordination mechanism with other creditors
  • Existing Term Lender (Capri Global Capital Limited) now formally recognized in debenture structure
  • Pari passu or subordination arrangements with existing creditors may affect security realization

Risk Considerations:

  • Changes to trustee discretion and consent mechanisms require careful review
  • Coordination with existing creditors may impact enforcement timelines and recoveries
  • Debenture holders should obtain legal advice on impact to their security interests
  • Schedule XIV review essential to understand existing financial indebtedness burden

Impact Justification

Material changes to INR 382.8 crore debentures affecting governance, trustee powers, and creditor relationships. Impacts existing debenture holders' rights and security arrangements.