sebi:WTM/PS/82/CFD-DCR/FEB/2014
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Facts / Headnote
Exemption granted from regulation 3(2) and (3) of the Takeover Regulations, 2011 for the proposed conversion of 40,00,000 1% CRPS into equity shares, with June 23, 2006 as the 'Relevant Date' for computation of price; application disposed of.
Provisions invoked
- s. 15A
- s. 19
- s. 15H
- s. 106
- s. 87(2)
- s. 87
- s. 81(1)
Regulations
- Reg. 10
- Reg. 4(2)
- Reg. 3(1)(j)
- Reg. 4(4)
- Reg. 11(1)
- Reg. 20(4)
- Reg. 20(5)
- Reg. 3(2)
- Reg. 74
- Reg. 10(2)
- Reg. 3(1)(l)
- Reg. 4(6)
- Reg. 78
- Reg. 11(5)
- Reg. 71
Holding
SEBI exempted the applicant and its PACs from the open offer obligations under regulations 3(2) and (3) of the Takeover Regulations, 2011 in respect of the proposed conversion of 40,00,000 1% CRPS into equity shares, with June 23, 2006 (the date CDR Cell approved conversion of the advance subscription into preference shares) as the 'Relevant Date' for computing the conversion price.
Full text
Page 2 of 34 seeking exemption from complying with the provisions of regulations 11(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as "the Takeover Regulations") for the proposed acquisition of 1,00,00,000 equity shares of ₹10/- each of the Target Company by conversion of 40,00,000 fully paid-up 1% Cumulative Redeemable Preference Shares ("CRPS") of ₹100/- each (30,00,000 CRPS allotted on October 28, 2004 and 10,00,000 CRPS allotted on March 29, 2005).
Page 3 of 34 (e) The CDR scheme was sanctioned by the CDR Cell vide their letter No. 946 dated October 4, 2004 and the State Bank of India (SBI) was appointed as the Monitoring Institution to oversee the due implementation of the Scheme. (f) As per the approved CDR Scheme, the Target Company was mandated inter alia for the following: (i) The Promoters shall pledge 51% of their shareholding with voting rights to the lenders. (ii) The Promoters shall arrange to convert the Advance Subscription of ₹ 40 crore. (g) However, the said conversion of Advance Subscription Money into Equity Shares could not be done in view of the subsisting order of the Hon’ble High Court of Delhi, passed in an Execution Petition filed by a lender against a Group Company of the Target Company, which restrained the Target Company from increasing or changing its paid-up equity capital from the level of 65,52,800 equity shares, in any manner . Therefore in view of the said Court Order, as a temporary measure, the advanced subscription of ₹ 40 Crore was converted into 40,00,000 1% Cumulative Redeemable Preference Shares (CRPS) of ₹ 100/- each (30,00,000 CRPS allotted on October 28, 2004 and 10,00,000 CRPS allotted on March 29, 2005). (h) As the said advanced subscription of ₹ 40 Crore was converted into CRPS as a temporary measure, the Banks kept on reminding the Company for converting the said CRPS into Equity shares and after conversion, for pledging the 51% of the resultant equity shares with them, which
Page 4 of 34 modifications in the payment schedule of the previous restructuring scheme as approved vide letter no. 946 dated 4th October 2004: (i) Deferment of the term loan instalments due for quarter ending March 2009 to December 2009, along with extension in repayment period. Term Loan to be fully repaid in March 2014 instead of June 2012. (ii) Rate of interest was increased from 9% pa to 10.75% pa. (k) While approving the above said Modifications, the CDR Cell directed the Target Company inter alia that the terms and conditions of the previous restructuring scheme, as approved vide letter no. 946 dated October 04, 2004, to remain unchanged and immediate steps shall be taken for conversion of ₹40 Crore CRPS into Equity Shares apart from the following terms and conditions. The directions are reiterated below: (i) The terms and conditions of the previous restructuring scheme will remain unchanged. (ii) To take immediate steps for conversion of ₹40 Crore Preference Shares into Equity Shares by 31st December 2009. (l) Accordingly, at the Target Company’s Board Meeting held on 28th August 2009, it was decided that subject to the shareholders’ approval, the Company shall convert the said ₹ 40 Crore CRPS into Equity Shares. The Target Company has accordingly, at its Annual General Meeting held on 30th September 2009 obtained the approval of its shareholders for fully implementing the CDR Scheme by conversion of the said CRPS into equity shares. (m) As already stated the said amo
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Source: SecMarx — sebi:WTM/PS/82/CFD-DCR/FEB/2014. 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.