Sadbhav Engineering Limited has taken decisive action to address regulatory compliance matters concerning board composition requirements, with the company's board approving payment of penalties imposed by stock exchanges.

Board Meeting and Compliance Resolution

The company's board of directors convened to address the matter of non-compliance with board composition requirements under Regulation 17(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The board formally approved the payment of fines as specified by both the National Stock Exchange of India Limited and BSE Limited in their respective notices.

Regulatory Compliance Achievement

The board was informed that the company has successfully ensured due compliance with Regulation 17(1) following a key appointment. The appointment of a new director has enabled Sadbhav Engineering to meet the prescribed board composition requirements under the SEBI regulations.

Stock Exchange Communication

Sadbhav Engineering Limited has formally communicated this development to both major stock exchanges where its shares are listed. The company has ensured transparency in regulatory compliance matters by addressing the communication to the Corporate Relationship Departments of both exchanges.

Corporate Governance Measures

The resolution of this compliance matter demonstrates the company's commitment to adhering to regulatory requirements and maintaining proper corporate governance standards. The board's proactive approach in addressing the non-compliance issue and implementing corrective measures reflects responsible corporate management practices.

Sadbhav Engineering has taken a significant step towards financial restructuring as its board of directors approved a comprehensive debt restructuring plan. The plan involves the conversion of ₹890.00 crores of fund-based debt into non-convertible debentures (NCDs) and authorizes the issuance of up to ₹1,000.00 crores worth of debentures on a private placement basis.

Debt Restructuring Framework

The company's restructuring plan centers on converting ₹890.00 crores of fund-based debt into NCDs structured across multiple tranches. The board authorized the execution of a Master Restructuring Agreement and ancillary agreements with consortium lenders to implement this resolution strategy.

The restructuring includes a feature where the NPV of interest computed at 8.99% p.a. IRR on NCD-II will be converted into equity upon plan implementation, subject to regulatory guidelines.

Debenture Issuance Authorization

The board approved the issuance of up to ₹1,000.00 crores worth of rupee-denominated, unlisted, rated, secured, taxable, redeemable non-convertible debentures on a private placement basis. These debentures will be issued in one or more series and tranches as required, aligning with the debt resolution plan submitted to consortium lenders.

Security and Risk Management

The debentures will be secured through hypothecation of current and non-current assets, along with mortgage of identified fixed assets. The plan addresses potential bank guarantee devolutions by converting any guarantees issued before implementation into Fund Based debt (NCD-III) up to a cap of ₹100.00 crores, serviced at 9.00% p.a. IRR.

This strategic move by Sadbhav Engineering aims to streamline debt repayment obligations and address future working capital needs, following the RBI's Prudential Framework for Resolution of Stressed Assets. The company's approach to financial restructuring demonstrates its commitment to long-term financial stability.