sebi:WTM/PS/56/CFD-DCR-1/SEPT/2015
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Facts / Headnote
Exemption granted from Regulation 3(2) of the Takeover Regulations
Provisions invoked
- s. 19
Regulations
- Reg. 11(1)
- Reg. 3(2)
- Reg. 8
- Reg. 76
- Reg. 76(1)
- Reg. 11(5)
Holding
SEBI granted exemption to the Government of India from the obligation to make an open offer under Regulation 3(2) of the Takeover Regulations for its proposed preferential allotment of 15,66,15,497 equity shares in Corporation Bank, increasing its shareholding from 63.33% to 69.11%.
Full text
Page 2 of 5 (iii) Pursuant to the same, the Board of Directors of the Bank, in their meeting held on August 24, 2015 and September 01, 2015, approved raising of the equity capital to the extent of ₹857 crore, by way of issue of equity shares in favour of the GoI, on preferential basis subject to the approval of the Reserve Bank of India (‘RBI’), the shareholders and other statutory authorities. Extra-Ordinary General Meeting (‘EGM’) of the shareholders was proposed to be convened on September 28, 2015, to pass the necessary resolution for the proposed issue of the equity shares to the GoI on preferential basis. (iv) The relevant date has been taken as August 28, 2015, for ascertaining the issue price to arrive at the quantity of shares to be issued. The issue price of ₹54.72 per equity shares is arrived at in terms of the Regulation 76 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (hereinafter referred to as ‘the ICDR Regulations’). Based on the issue price and the issue size of ₹857 crore, the total number of shares proposed to be allotted to the GoI would be 15,66,15,497 equity shares. Accordingly, the post issue shareholding of the GoI would be 68,71,41,382 equity shares (i.e. 69.11%). (v) As the difference between the pre-allotment and post-allotment shareholding of the GoI in the Target Company would be more than 5% (the shareholding of the GoI may increase from 63.33% to 69.11%, an increase of around 5.78%), the GoI had asked the Target Co
Page 3 of 5 (iv) From the notice of EGM, it is noted that even after infusion of capital by the GoI and proposed preferential allotment, the public shareholding would be maintained at around 30.89% and there would no change in control in the management of the Bank.
Page 4 of 5 7. The issue price for the proposed allotment has been fixed at ₹54.72 per equity share of ₹2 each, in terms of Regulation 76(1) of the ICDR Regulations, taking into consideration August 28, 2015 as the ‘relevant date’. The proposed allotment of 15,66,15,497 equity shares of the Target Company to the GoI would increase the shareholding of the GoI (in the Target Company) from 63.33% to 69.11%, would trigger the provisions of Regulation 3(2) of the Takeover Regulations. Accordingly, the Bank on behalf of the GoI, has sought exemption from the applicability of the said regulation.
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Source: SecMarx — sebi:WTM/PS/56/CFD-DCR-1/SEPT/2015. 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.