sebi:MO/51/CFD/08/04

SEBI · SEBI · 2004-06-02 · A K Batra, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Exemption granted subject to conditions

Provisions invoked

• s. 19
• s. 81

Regulations

• Reg. 4
• Reg. 11
• Reg. 4(2)
• Reg. 3(4)

Holding

The acquirers are exempted from making an open offer under regulation 11(1) for the proposed preferential allotment of 41,00,000 equity shares of N. R. Agarwal Industries Ltd., subject to fulfilment of specified conditions.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ Order Against N. R. Agarwal Industries Aug 05, 2004 | Orders : Orders of Chairman/Members MO/51/CFD/08/04 SECURITIES AND EXCHANGE BOARD OF INDIA

1.1 N. R. Agarwal Industries Ltd. (hereinafter referred to as ‘the target company’) is a public limited company, incorporated under the Companies Act, 1956 and having its registered office at 415-418, Janki Centre, 4th floor, 29, Shah Industrial Estate, Off. Veera Desai Road, Andheri (West), Mumbai – 400 058. 1.2 The equity shares of the target company are listed at The Stock Exchange, Mumbai, Ahmedabad Stock Exchange and Delhi Stock Exchange Association Ltd. 1.3 The target company is a leading manufacturer of Duplex Boards and Newsprint Papers. During the year 2002-2003, the profit of the target company to the total income to the said year was not even 1%. The target company, in its effort to reduce cost and remain competitive, has decided to install a power plant at the factory premises situated at Vapi, Gujarat State, which would bring about substantial savings in cost and allow it to produce higher quantities and increase its turnover. The said Power project has been appraised by Bank of India, who have sanctioned a term loan of Rs. 700 lakhs for the said project, with the margin money to be brought in by the promoters. Therefore, the promoters of the target company have decided to bring in the margin money by way of issue of 41,00,000 lac equity shares on preferential basis, at Rs. 10 per share. 1.4 As on date, the promoters of the target company hold 28.44% of the company’s capital. Of this, 19.21% is held by 8 entities, namely, Shri Nagindas R Agarwal, Smt. Suman N Aga

proposed acquisition, the holding of the promoters would be 57.06% of the post issue paid up capital of the target company, as against the present 28.44%. 2.0 APPLICATION FOR EXEMPTION 2.1 The acquirers made an application dated June 02, 2004 to the Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) under sub- regulation (2) of regulation 4 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as ‘the said Regulations’) seeking exemption from making a public offer in respect of the proposed acquisition of 41,00,000 equity shares by way of preferential allotment of the equity shares of the target company from the applicability of regulation 11 (1) of the said Regulations. The shareholding of the promoter in the target company (together with those of the persons acting in concert) would increase from 28.44% to 57.06% after the proposed acquisition. 2.2 As per the aforesaid application, the shareholding pattern of the target company before and after the proposed acquisition, is as follows: Shareholders category Number of registered shareholders as on date of application Before the proposed acquisition After the proposed acquisition Number of shares/total voting rights held %

Source: SecMarx — sebi:MO/51/CFD/08/04. 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.