Saturday, February 15, 2014

RBI allows Asset Reconstruction Companies to convert debt into equity

The Reserve Bank of India (RBI) has permitted asset reconstruction companies (ARCs) to convert debt of crisis- ridden companies into equities as part of restructuring process. Such companies are required to obtain, for the purpose of enforcement of security interest, the consent of secured creditors holding not less than 60 percent of the amount outstanding to a borrower as against 75 percent at present.

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