sebi:MO/5/IMD/10/03
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Facts / Headnote
Exemption granted
Provisions invoked
- s. 19
- s. 81
- s. 45N
Regulations
- Reg. 4
- Reg. 20
- Reg. 20(4)
Holding
SEBI granted the Acquirers exemption from Chapter III of the Takeover Regulations for the preferential allotment of 113,079,533 shares at Rs. 26.53 per share approved on August 26, 2003, to be completed within 30 days with a status report within 15 days thereafter.
Full text
its employees, fixed deposit holders and most importantly its public shareholders . The proposed allotment of equity shares to the acquirers by converting the non- refundable advances would be pursuant to the Directions issued by RBI under Section 45N of RBI Act, 1934. 4.0 The said application was forwarded to the Takeover Panel in terms of sub regulation (4) of regulation 4 of the Regulations. The Takeover Panel vide its report dated July 24, 2003 has recommended, inter alia, as under: “In substance, as borne out from the facts disclosed, the objective appears to be to revive the sick company by additional capitalization from the group companies. In the circumstances, grant of exemption as sought is recommended subject to – i) the target company passing the requisite resolution as per Section 81 (1A) of the Companies Act, 1956 and complying with all procedural formalities in connection therewith; and ii) allotment price is higher between the price fixed in accordance with pricing formula under SEBI ( Disclosure & Investor Protection ) Guidelines,2000 and Regulation 20 of the Takeover Code.”
India Act, 1992 read with sub-regulation (6) of regulation 4 of the Regulations, hereby grant exemption, to the Acquirers from complying with the provisions Chapter III of the Regulations with regard to the proposed acquisition of 113,079,533 at a price of Rs. 26.53 per share in the preferential allotment approved by the share holders of the Target company in the Annual General Meeting held on August 26, 2003. 6.1 The Acquirers are directed to complete the proposed acquisition within 30 days of the order and file a status report with the Board on the same within 15 days thereafter. 6.2 This order shall come into force with immediate effect. A.K.BATRA MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Date: October 10, 2003 Place: Mumbai
5.0 I have taken into consideration the application dated July 1, 2003, the material available on record and the recommendations of Takeover Panel. 5.1 It is noted that the Acquirers hold 3,25,46,682 equity shares (representing 37.53% ) of the target company. 5.2 It is noted that the Acquirers propose to convert Rs.300 Crores advanced to the target company in to equity capital of the target company to comply with the directions issued by RBI under Section 45N of the RBI Act 1934 vide its letter dated February 3, 2003. 5.3 It is noted that the preferential allotment of 113,079,533 to the Acquirers on conversion of Rs.300 Crores advanced by the acquirers is to ensure that the target company achieves the capital adequacy norms prescribed by RBI. 5.4 It is noted that in the Annual General Meeting of the company held on August 26,2003 the shareholders unanimously approved the special resolution under Section 81(1A) of the Companies Act 1956 for preferential issue of 113,079,533 shares at a price of Rs.26.53 per share to the Acquirers. 5.5 The shares of the Target company are frequently traded at BSE and NSE and in terms of Regulation 20(4) of the Regulations the price of the share as on 1.07.2003 is Rs. 23.47 ( date of the application being the referral date)per share and the book value per share of the Target company as on the date of application is Rs 13.33. 6.0 Taking into consideration the above, the recommendations of the Take
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Source: SecMarx — sebi:MO/5/IMD/10/03. 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.