Embassy Developments Seeks ASM Framework Removal After NCLAT Stay on Bankruptcy

Embassy Developments has formally requested stock exchanges to remove its shares from the Additional Surveillance Measure (ASM) Framework, following a stay order by the National Company Law Appellate Tribunal (NCLAT) on bankruptcy proceedings. The company aims to clarify its operational status and address the inadvertent inclusion of its equity shares under the ASM Framework.

The NCLAT has put a hold on the bankruptcy process for Embassy Developments Limited, providing significant relief to the company following the National Company Law Tribunal's (NCLT) earlier admission of an insolvency petition.

Stock Exchange Reclassification Issue

Embassy Developments' equity shares were inadvertently placed under the ASM Framework and reclassified under the BE segment (Trade-to-Trade settlement) by BSE Limited and the National Stock Exchange of India Limited with effect from December 16. The reclassification was based on the company's announcement made on December 11 at 9:07 A.M. regarding the admission of Canara Bank's insolvency petition by the NCLT Delhi Bench.

Stock Exchange Action	Details
Reclassification Date	December 16
Framework	Additional Surveillance Measure (ASM)
Segment	BE (Trade-to-Trade settlement)
Exchanges	BSE Limited and NSE
Trigger	NCLT bankruptcy admission

NCLT Order Details and NCLAT Stay

The NCLT Delhi Bench had admitted Canara Bank's insolvency petition against Embassy Developments Limited on December 9, seeking to initiate Corporate Insolvency Resolution Process (CIRP). However, the company made a subsequent disclosure on December 11 at 2:46 P.M. informing that the NCLAT had granted a stay on the operation of the NCLT order, thereby staying all proceedings under the IBC arising therefrom.

NCLT Proceedings	Details
Order Date	December 9
Petitioner	Canara Bank (E-Syndicate Bank)
Alleged Liability	₹372.36 crore
Principal Borrower	Sinnar Thermal Power Limited
IRP Appointed	Mr. Prabhat Ranjan Singh
NCLAT Stay Date	December 11

Company's Formal Representation

Embassy Developments has made appropriate representations to both stock exchanges regarding the inadvertent inclusion of its equity shares under the ASM Framework and BE segment. The company has formally requested removal of its equity shares from these classifications in light of the subsisting stay on proceedings under the IBC. Company Secretary Vikas Khandelwal signed the representation letter dated December 17.

The company clarified that pursuant to the NCLAT order, Embassy Developments is not presently subject to the Corporate Insolvency Resolution Process and continues to remain financially sound and fully operational.

Background of Legal Dispute

The original insolvency petition filed by Canara Bank pertained to Embassy Developments Limited's alleged role as a guarantor for loan facilities provided to Sinnar Thermal Power Limited. The facilities included:

Loan Facilities	Amount (₹ Crore)	Purpose
Rupee Term Loan	100.00	Thermal Power Project Setup
Term Loan (COR-I)	15.57	Cost Overrun Facility
Term Loan (COR-II)	28.83	Cost Overrun Facility
Total Facilities	144.40	Project & Overruns

Embassy Developments has maintained that the disputed liability stems from historical business operations that were restructured over a decade ago. The company clarified that the power business and the borrower entity were demerged in 2011 into Rattan India Enterprises Limited, and following promoter separation in 2014, the power business became part of a separate promoter group.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-4.67%	-2.41%	-20.43%	-47.99%	-47.31%	-58.64%

Embassy Developments Limited , formerly known as Equinox India Developments Limited and earlier as Indiabulls Real Estate Limited, has announced a significant development regarding its convertible warrants. The company reported that a substantial number of warrants issued to public shareholders have lapsed due to non-conversion within the prescribed period.

Key Details of the Lapsed Warrants

Particulars	Details
Number of Lapsed Warrants	4,75,27,464
Forfeited Amount	INR 132,49,46,877.66
Forfeited Amount (in Crores)	INR 132.49
Reason for Forfeiture	Failure to exercise conversion rights within the prescribed period
Forfeited Amount Represents	25% upfront consideration paid at the time of warrant allotment

Regulatory Compliance

The company's action to forfeit the upfront consideration is in compliance with Regulation 169(3) of Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations).

Impact on Shareholders

This development primarily affects certain warrant-holders who were part of the public shareholders. These individuals or entities had been issued and allotted convertible warrants under a preferential issue but failed to exercise their conversion rights within the specified timeframe.

Company's Disclosure

Embassy Developments Limited made this disclosure in accordance with Regulation 30 read with Schedule III and other applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (SEBI LODR Regulations).

This event underscores the importance for investors to be aware of the terms and conditions associated with convertible securities, including the prescribed conversion periods. It also highlights the potential financial implications of not exercising conversion rights in a timely manner.