Description

Godrej Properties Ltd proposes changes to Debenture Trust Deed dated 04th July 2023 for INR 1,500 Cr Non-Convertible Debentures, removing broad covenants that statutory auditors cannot certify.

Summary

Godrej Properties Ltd (GPL) has proposed amendments to the Debenture Trust Deed dated 04th July 2023 for Non-Convertible Debentures worth INR 1,500 Crores. The amendments involve deletion of five broad covenants that statutory auditors are unable to certify due to their open-ended nature. These covenants will be incorporated into management representation instead, with Debenture Trustee approval obtained.

Key Points

  • Total NCD issuance: INR 1,500 Crores under Trust Deed dated 04th July 2023
  • Two ISINs affected: INE484J08048 and INE484J08030
  • Five covenant clauses (2.3(i), 2.3(iii), 2.3(viii), 2.3(xv)(b), 2.3(xxiv)(c)) being deleted from Trust Deed
  • Deleted covenants will be incorporated into management representation
  • Debenture Trustee has approved all proposed changes
  • Reason for changes: Statutory auditors unable to provide certification on broad and open-ended covenants

Regulatory Changes

Deleted Covenants from Trust Deed:

Clause 2.3(i): Obtaining, complying with, and maintaining authorizations necessary for business operations and Transaction Document obligations

Clause 2.3(iii): Compliance with all provisions of Disclosure Documents and Transaction Documents until Redemption Date

Clause 2.3(viii): Payment and discharge of all taxes, rates, rents, and governmental charges before penalties attach, and making all required filings under Applicable Laws

Clause 2.3(xv)(b): Obtaining and maintaining authorizations required to lawfully comply with Transaction Documents

Clause 2.3(xxiv)(c): Supplying details of litigation, arbitration, or administrative proceedings that could restrain obligations or have Material Adverse Effect

Compliance Requirements

  • Godrej Properties Ltd to incorporate deleted covenants into management representation letters
  • Supplementary Debenture Trust Deed to be executed documenting these changes
  • Management representation to cover authorizations, compliance, tax payments, filings, and litigation disclosure
  • Changes require formal documentation through supplementary deed

Important Dates

  • Original Trust Deed Date: 04th July 2023
  • Circular Date: 10th November 2025
  • No specific implementation deadline mentioned in the circular

Impact Assessment

Debenture Holders: Minimal direct impact as covenants remain enforceable through management representation and Debenture Trustee has approved changes. Shifts monitoring mechanism from statutory auditor certification to management attestation.

Godrej Properties Ltd: Reduces auditor certification burden while maintaining covenant obligations through management representation. Streamlines compliance processes for broad operational covenants.

Statutory Auditors: Removes requirement to certify open-ended covenants that lack specific measurable criteria.

Market Impact: Limited market impact as this is a procedural amendment with Debenture Trustee approval, maintaining substantive protections through alternative mechanism.

Impact Justification

Amendment to debenture covenants affects INR 1,500 Cr debt issuance but changes are procedural in nature, moving covenants from trustee certification to management representation with debenture trustee approval.