sebi:CO/204/TO/09/2002

SEBI · SEBI · 2002-08-29 · G.N. Bajpai, Chairman

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Facts / Headnote

Exemption granted from Chapter III open offer requirements subject to conditions

Regulations

• Reg. 4
• Reg. 11
• Reg. 5
• Reg. 20

Holding

SEBI granted the Acquirer exemption from complying with Chapter III including Regulation 11(1) public announcement and open offer formalities for acquisition of 49.50% (4,95,000 shares) from 13 public shareholders of Starline Ispat and Alloys Ltd. The exemption is conditional on sending individual offer letters at Rs.1/- per share by registered acknowledgement due post, completing the offer within 3 months, and filing a status report with auditor certificate.

Full text

4.95,000 equity shares) of the Target company from the public shareholders. The Acquirer would be required to make an open offer to acquire the said shares of the Target company in terms of sub regulation (1) of regulation 11 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as " the Regulations"). 1.1 The shares of the Target company are listed at the Guwahati Stock Exchange( The Exchange). 2.0 The Acquirer made an application dated August 29, 2002 under sub-regulation (2) of regulation 4 of the Regulations to the Securities and Exchange Board of India (hereinafter referred to as 'the Board') seeking exemption from making public offer and from compliance with the making of public announcement and other formalities under sub regulation (1) of regulation 11 of the Regulations. In the said application, the Acquirer submitted, inter-alia, the following: (i) The Acquirer along with the persons acting in concert are presently holding 50.50% of total paid-up share capital of the Target company. (ii) The Acquirer proposes to acquire 49.50% shares of the Target company from the remaining 13 public shareholders at a price of Re 1/- per share payable in cash. 3.0 The Acquirer has sought exemption from making the public announcement and other provisions of Chapter III of the Regulations on the following grounds: (i) The promoters (Acquirer) are holding 50.50% of the voting capital of the Target company. (ii) The Target company has a ver

the target company by directly approaching the remaining shareholders. The said offer is not likely to lead to change of control / management of the target company. In the facts stated, grant of exemption as sought is recommended subject to the Acquirer- (i) making individual offers to each of the remaining shareholders by directly addressing offer letters offering to buy the shares held by such individual shareholders and posting such letters by registered acknowledgement due post; (ii) submitting certificate of auditor / independent Chartered Accountant to the effect that the offer letters were so posted; (iii) offering the minimum price per share calculated in accordance with the provisions of Regulation 20 of the Takeover Code." 5.0 I have taken into consideration the application dated 29.08.2002, the facts and documents available on record and also the recommendations of Takeover Panel. 5.1 It is observed that the public shareholding is 49.50% of the paid-up capital of the Target company held by 13 shareholders. I find that there will be no change in control / management of the Target company by virtue of the acquisition of shares by the Acquirer from the public shareholders since the Acquirer along with the persons acting in concert is holding 50.50% of the paid- up capital of the Target company and the Acquirer proposes to acquire all the outstanding public shareholding of the Target company. The Acquirer is only consolidating its shareholding in the Target company. I

offer to be made to the public shareholders of the Target company for acquisition of 49.5% of the paid-up capital of the Target company in terms of sub-regulation (1) of regulation 11 of the Regulations subject to the following - (i)that individual letters of offer to each public shareholder of the Target company, offering to buy the shares at the price of Rs.1/- per share shall be sent by the Acquirer by "registered acknowledgement due" post; (ii)the proposed offer be completed within 3 months from the date of passing of this Order and a status report on the same shall be filed by the Acquirer with the Board within 15 days of completion of the offer. The Acquirer shall submit the certificate of Auditor / independent Chartered Accountant to the effect that the letters of offer were so posted; Date: September 27th, 2002 Place: Mumbai G.N. BAJPAI CHAIRMAN

Source: SecMarx — sebi:CO/204/TO/09/2002. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.