sebi:WTM/PS/68/CFD-DCR-1/DEC/2013
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Facts / Headnote
Application disposed of; exemption granted
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 3(2)
- 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 in respect of its proposed acquisition of 11,85,83,771 shares by preferential allotment by Dena Bank against infusion of ₹700 crores, which would increase GoI's shareholding from 55.24% to 66.57%.
Full text
Page 2 of 5 authorities. An Extra-Ordinary General Meeting ("EGM") of the shareholders has been convened on December 24, 2013 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 November 22, 2013 for ascertaining the issue price to arrive at the quantity of shares to be issued. The issue price of ₹ 59.03/- per equity shares is arrived at in terms of regulation 76(1) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("the ICDR Regulations"). Based on the issue price and the issue size of ₹700 crore, the total number of shares that would be allotted to the GoI would be 11,85,83,771 equity shares. Accordingly, the post issue shareholding of the GoI would be 31,19,69,644 equity shares (i.e. 66.57%). (v) As the difference between the pre-allotment and post-allotment shareholding of the GoI in the Bank may be over 5% (the shareholding of the GoI may increase from 55.24% to 66.57%, an increase of around 11.33% ), the GoI vide letter dated October 31, 2013 has advised the Bank to seek exemption (from SEBI) from the obligation of making an open offer stipulated under regulation 3(2) of the Takeover Regulations.
Page 3 of 5 (v) Infusion of capital by GoI will also give the Bank additional leverage to raise further equity capital through Qualified Institutional Placement ('QIP')/Preferential issue to others at a later date, as and when the need arises.
Page 4 of 5 7. The proposed allotment to the GoI would increase the shareholding of the GoI from 55.24% to 66.57%. This resultant increase in the shareholding/voting rights of the GoI of around 11.33%, would trigger the provisions of regulation 3(2) of the Takeover Regulations. Therefore, the Bank on behalf of GoI, has sought exemption from the applicability of the said regulation.
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Source: SecMarx — sebi:WTM/PS/68/CFD-DCR-1/DEC/2013. 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.