Akzo Nobel India announced it has received notification from JSW Paints regarding the applicability of certain clauses of a debenture trust deed (DTD) following JSW Paints’ impending acquisition of Akzo Nobel India. Key aspects of the DTD become relevant upon the closing of the acquisition, potentially influencing Akzo Nobel India’s operational actions. The DTD includes standard covenants and potential restrictions aimed at preserving asset value and ensuring compliance.
Acquisition’s Impact on Operations
Following the impending acquisition of Akzo Nobel India by JSW Paints Limited, certain specified clauses of a debenture trust deed (DTD) dated October 30, 2025, will become applicable to Akzo Nobel India. This was communicated to Akzo Nobel India on November 12, 2025, by JSW Paints. The DTD outlines obligations and potential restrictions that will take effect from the Acquisition Closing Date as defined in the DTD.
DTD Details and Restrictions
While Akzo Nobel India is not a direct party to the DTD, certain provisions within it are applicable to the company following the acquisition. These provisions include standard representations, warranties, and covenants designed to protect the debenture holders. JSW Paints, as the issuer, has agreed to ensure Akzo Nobel India complies with customary positive covenants to maintain its business operations appropriately.
Value Preservation Measures
The DTD stipulates that certain actions by Akzo Nobel India require adherence to specific parameters, consent from the Debenture Trustee, or compliance with DTD terms. These actions include:
- Entering into any amalgamation, demerger, merger, consolidation, spin-off, reorganization, restructuring, or actions changing capital structure.
- Engaging in transactions to sell, lease, or transfer assets.
- Creating security over assets.
- Incurring financial indebtedness.
- Undertaking asset or business transfers.
- Altering the nature of its business.
- Voluntary winding-up or liquidation.
- Making loans or providing financial accommodations beyond permitted levels.
Any disposal of fixed assets not permitted under the DTD terms may trigger a monetisation event, requiring the issuer to redeem debentures for an equivalent amount of proceeds from the disposal.
Control and Compliance
Upon the acquisition’s consummation, JSW Paints will acquire control over Akzo Nobel India. This is subject to compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, and JSW Paints will subsequently be classified as a promoter of Akzo Nobel India. The Issuer has also warranted on a continuing basis that it will control ANIL.
Source: BSE
