sebi:WTM/KMA/CFD/292/08/2010
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Facts / Headnote
Exemption granted from compliance with Regulation 11(2) of the Takeover Regulations, subject to a three-year lock-in condition
Provisions invoked
- s. 19
- s. 81
Regulations
- Reg. 4
- Reg. 11(2)
- Reg. 4(6)
Holding
SEBI granted exemption to Thakral Brothers (Pte) Limited from complying with Regulation 11(2) of the Takeover Regulations in respect of its proposed acquisition of 2,28,00,000 equity shares of Givo Limited at Rs. 5.25 per share on conversion of ECB of Rs. 11.97 Crores, subject to a three-year lock-in on the allotted shares.
Full text
Page 2 of 8 liability by way of converting them into equity shares, through the proposed preferential allotment of 2,28,00,000 at Rs. 5.25 (including premium of Rs. 2.25) per share which has been arrived at on the basis of taking December 12, 2009 as the “Relevant Date” in accordance with the provisions relating to the preferential allotment in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (hereinafter referred to as the ICDR Regulations). The acquirer has stated that the proposed preferential allotment is in accordance with the guidelines on the conversion of ECB into equity shares contained in Master Circular No. 2/2009-10 dated July 1, 2009 issued by RBI. According to the acquirer, pursuant to the proposed preferential allotment, its shareholding would increase from ‘nil’ to 28.32% and that of the promoter group (including the acquirer) from 64.17% to 74.31% of the equity capital of the target company.
Page 3 of 8 3. The shareholding pattern of the target company before and after the proposed preferential allotment (as mentioned in the application) is as under: Shareholders’ category Number of registered shareholders as on the date of application Before the proposed acquisition After the proposed acquisition
Page 4 of 8 representative) along with Mr. Nesar Ahmad and Mr. S.N. Ananthasubramaniam (practising company secretary) appeared before me on the said date and made submissions on behalf of the acquirer. It was inter alia submitted before me that the target company had become a sick unit and remained so till 2006 until they made one time settlement with the creditors. According to the acquirer, despite the fact that the target company was deregistered from the purview of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), it was not in a position to repay the ECB loan. As per the acquirer, it was for this reason that the target company had proposed the conversion of ECB liability into equity shares. During the course of hearing, in order to substantiate its case, the acquirer requested time to submit a revival plan of the target company. Accordingly, two weeks time was granted to the acquirer. Subsequently, vide letter dated May 10, 2010, the acquirer requested SEBI to grant another opportunity of hearing to the target company while filing the revival plan. Accordingly, an opportunity was provided to the target company on June 15, 2010. However, the acquirer, vide letter dated June 7, 2010 informed SEBI about the inability of the target company to appear on the said date and requested to adjourn the hearing. The said request was acceded to by SEBI and another opportunity was afforded to the acquirer on July 7, 2010, when Mr. Ajay Srivastava, director of the target
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Source: SecMarx — sebi:WTM/KMA/CFD/292/08/2010. 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.