SEBI Update - Status of SPVs post conclusion or termination of Concession Agreement

SEBI, vide circular, has prescribed conditions regarding the status of Special Purpose Vehicles (SPVs) held by Infrastructure Investment Trusts (InvITs) upon conclusion or termination of concession agreements or similar arrangements. Pursuant to the amendment in Regulation 2(1)(zy)(ii) of the SEBI (InvIT) Regulations, 2014, such SPVs may continue to retain their SPV status subject to specified conditions. The Investment Manager is required to either exit the investment in such SPV through sale, liquidation, winding-up or merger, or acquire a new infrastructure project in the SPV within one year from the later of completion/termination of the concession agreement, conclusion of pending assessments and related appeals, or completion of the defect liability period, excluding time taken for obtaining statutory or regulatory approvals. Further, detailed disclosures are required to be made in the annual report at both InvIT and SPV levels regarding the value of investments, project status, assets and liabilities, contingent liabilities, debt repayment obligations, sufficiency of assets, exit strategy and timeline, and other material pending matters. The circular has come into force with immediate effect.claims/litigations/tax