Ministry to amend 30 April preference share guidelines

Ministry to amend 30 April preference share guidelines
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First Published: Tue, Jun 26 2007. 11 52 PM IST
Updated: Tue, Jun 26 2007. 11 52 PM IST
New Delhi: The finance ministry on Tuesday announced that guidelines issued on 30 April tightening foreign investment through preference shares would be amended to allow companies that were then at an advanced stage of raising capital through preference shares, a chance to finish the process. Firms should have taken “verifiable steps” and “effective steps” on 30 April in raising money through preference shares to qualify for an exemption, said a ministry release. The companies claiming such an exemption should issue the shares and collect the money by 31 July, it said. The 30 April guideline classified fully convertible preference shares as equity capital and the balance as debt. In addition, preference share classified as debt had to conform to stringent external commercial borrowing restrictions.
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First Published: Tue, Jun 26 2007. 11 52 PM IST