Takeover Panorama - TakeoverCode.com
Takeover Panorama - TakeoverCode.com
Takeover Panorama - TakeoverCode.com
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share will be Rs.36 crores against the total requirement of Rs.50 crores and there will be a short fall ofRs. 14 crores to be filled by an alternative source to meet the requirements.Decision:From the shareholders resolution, SEBI noted that Aryaman Commerce Private Limited (new investor)would also be allotted 6,66,60,000 equity shares (13.82%) of the Target Company on preferential basis,in addition to the preferential allotment of 15,55,90,000 shares. Further it is observed that through rightissue an amount of Rs 36 crore could be raised, if resorted to and by issuing the shares on right basis, allthe shareholders of the Target Company would get an equal opportunity in the fund raising exercise bythe Target Company for the new project. Moreover if the portion of right issue remains unsubscribed,the promoters/acquirers could subscribe to the unsubscribed portion without triggering the SEBI (SAST)Regulations, 1997.Further the acquisition of shares through preferential allotment is not automatically exempted from theapplicability of the <strong>Takeover</strong> Regulations and the objective in this case is not a fit case to make it eligiblefor grant of exemption. Furthermore at present the public shareholding of Target Company is 74% andin respect of proposed acquisition a large number of shareholders would be denied of the exitopportunity. Therefore considering all the facts and circumstances of the case, SEBI rejected theexemption to the acquirers from the applicability of Regulation 10 and 11(1) of the SEBI (SAST)Regulations, 1997.Facts:<strong>Takeover</strong> Panel Order in the matter of Expo Gas Containers Limited1. Jawad Trading Company Private Limited (Acquirer)belongs to the promoter and promoter group of ExpoGas Containers Limited (Target Company) andcurrently does not hold any shares in the TargetCompany. However with the other promoters,acquirer holds 21.42% of the total paid up capital ofthe Target Company.2. Now the Acquirer proposes to acquire 1,12,50,000equity shares of the Target Company by way ofSEBI granted the exemption from the openoffer obligations for the increase inshareholding pursuant to the conversion ofwarrants where the warrants were allottedto the acquirer to Honor the OTS andexemption would be in the interest of theshareholders.Page 8 of 20