Mergers and acquisitions get a boost: RBI’s new framework should deepen India’s market for buyout finance
The quantum and equity contribution rules cap bank financing at 75% of the assessed ‘acquisition value,’ with the acquirer contributing at least 25% from its own funds. For unlisted targets, two independent valuations are required and the lower one applies. Listed acquirers may bridge this contribution for up to 12 months, subject to a clearly identified equity take-out, secured status if bridged by a bank, and no dilution of the acquisition finance security package.
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