Open offer pain

New norms may lead to fewer players in bankruptcy resolution

The Securities and Exchange Board of India (Sebi) has tightened the norms for open offer exemptions in cases of debt restructuring. Only lenders such as banks and financial institutions will receive exemptions from open offers when taking over a company under the Insolvency and Bankruptcy Code (IBC). This is aimed at giving minority shareholders a fair deal in takeovers. But it could also cause some impediment to the process of disposing of bankruptcy cases since it raises costs for asset reconstruction companies (ARCs), or “white knights”. Under normal circumstances, the Sebi Takeover Code demands that when an entity acquires 25