Takeover Panorama - TakeoverCode.com

More documents

Recommendations

Info

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 Takeover 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:Takeover 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
conversion of 45,00,000 warrants into equity shares on preferential allotment basis at a price of Rs14.15, which would increase the shareholding of Acquirer from 21.42% to 67.86%, thereby triggeringRegulation 11(1) and (2) of SEBI (SAST) Regulations, 1997.3. Therefore, the acquirers has filed the present application seeking exemption from the applicability ofRegulations 11(1) and 11(2) of SEBI (SAST) Regulations, 1997 on the following grounds:Grounds for exemption:1. The company was making heavy losses from 2002 onwards and has availed finance from IDBI and UBI.Due to non payment, cases were filed against the company in Debt Recovery Tribunal (DRT). Thereforethe company has finally negotiated with IDBI and UBI for a One Time Settlement (OTS) and accordinglysettles its dues.2. To honor the OTS, the Target Company has allotted warrants of Rs 4,50,00,000 to the Acquirer. Incompliance of the requirement the acquirer brought Rs 1,12,50,000 being 25% of the total amountpayable.3. Subsequently the Target Company undertook restructuring exercise whereby the equity shares of thecompany was reduced by Rs 4,67,18,400 and such amount along with the amount lying in sharespremium account was used to wiping out the accumulated losses.4. The exemption would be in the interest of the Target Company and its minority shareholders.5. No change in controlDecision:On the basis of above facts and circumstances of the case, SEBI granted the exemption to the acquirerfrom the applicability of Regulation 11(1) and 11(2) with respect to the proposed acquisition of1,12,50,000 equity shares by way of conversion of warrants into shares subject to the acquirercomplying with the other provisions of SEBI Takeover Regulations, Buy Back Regulations, ListingAgreement or any other law as may be applicable.Page 9 of 20
Page 1 and 2: Takeover PanoramaA Monthly newslett
Page 3 and 4: Legal UpdateAdjudicating Officer or
Page 5 and 6: 2. Accordingly a show cause notice
Page 7: Takeover Panel Order in the matter
Page 11 and 12: i. Inter se transfer of 8,600 share
Page 13 and 14: Nath Mittal, BrijEquity Shares at a
Page 15 and 16: Duties of the Stock Exchange:The St
Page 17 and 18: a recognised stock exchange; and(b)
Page 19 and 20: Market Updates NYSE Euronext to sel

Takeover Panorama - TakeoverCode.com

Create successful ePaper yourself

Delete template?

Save as template?