sebi:WTMO/01/CFD/06/2005

SEBI · SEBI · 2004-12-24 · Madhukar, Whole-Time Member

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Facts / Headnote

Exemption granted from complying with Regulation 11(1) of the Takeover Regulations with respect to the proposed acquisition of 23,18,388 equity shares pursuant to preferential allotment, subject to conditions.

Provisions invoked

• s. 19
• s. 81
• s. 173
• s. 67
• s. 81(1)

Regulations

• Reg. 7
• Reg. 4
• Reg. 4(2)
• Reg. 11(1)
• Reg. 3(4)

Holding

SEBI granted exemption to Shri. Mekan. J. Gala from making an open offer under Regulation 11(1) of the Takeover Regulations for the proposed acquisition of 23,18,388 equity shares of Speciality Papers Ltd. through preferential allotment, subject to conditions including that the promoter group shareholding shall not exceed 55%.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ ORDER IN THE MATTER OF PROPOSED ACQUISITION OF SHARES OF SPECIALITY PAPERS LTD. – EXEMPTION APPLICATION FILED UNDER REGULATION 4(2) OF THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997.

WTMO/01/CFD/06/2005 1.0 BACKGROUND 1.1 Speciality Papers Ltd. (hereinafter referred to as ‘the target company’) is a public limited company incorporated under the Companies Act, 1956, having its registered office at P.O. Box No. 7, Morai Village, National Highway No. 8, Vapi. Distt., Valsad, Gujarat. 1.2 The equity shares of the target company are listed on The Stock Exchange, Mumbai. 2.0 APPLICATION FOR EXEMPTION 2.1 Shri. Mekan. J. Gala (hereinafter referred to as ‘acquirer’) made an application dated 24.12.04 under Regulation 4(2) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (hereinafter referred to as ‘the Takeover Regulations’), seeking exemption from the compliance of Chapter III of the Takeover Regulations with respect to the proposed acquisition of 31,18,388 equity shares, of the target company through preferential allotment. 3.0

3.1 The present paid up equity share capital of the target company is Rs.2,35,50,000 divided into 23,55,000 equity shares of face value of Rs.10 each. The acquirer is the promoter of the target company and holds .01% shares in the target company. The shareholding of the promoter group, including that of the acquirer, in the target company is 28.08%. 3.2 In respect of the said acquisition of 31,18,388 (56.96%) equity shares, the acquirer has sought exemption from making an open offer in terms of Takeover Regulations. The exemption is sought in view of the following: i. The target company was under the Board for Industrial and Financial Reconstruction formed as per the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as ‘BIFR’) for almost 15 years and the existing management which includes the acquirer was instrumental in reviving the company and brought it out of BIFR. As a part of the acquirer’s on going exercise in uplifting the company, he has agreed to block his funds lying with the target company in the form of unsecured loans to be converted into equity capital. ii. The acquirer proposes to acquire 56.97% ie: 31,18,388 equity shares on preferential basis at a price of Rs.19.85/- per share. The acquirer is compelled to acquire equity shares worth Rs.6,19,00,000/- due to the condition imposed by the State Bank of India, Ghatkopar(W) Branch (hereinafter referred to as ‘bank’), else the target company will have to pay extra

Source: SecMarx — sebi:WTMO/01/CFD/06/2005. 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.