sebi:WTMO/07/CFD/05/2006

SEBI · SEBI · 2005-12-10 · T. C. Nair, Member, Securities and Exchange Board of India

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Facts / Headnote

Exemption granted from complying with Regulation 11(1) of the Takeover Regulations, subject to conditions

Provisions invoked

• s. 19
• s. 81
• s. 173
• s. 15(1)

Regulations

• Reg. 4
• Reg. 11
• Reg. 4(2)
• Reg. 11(1)
• Reg. 3(5)
• Reg. 10
• Reg. 3(4)
• Reg. 3(1)

Holding

SEBI granted exemption to the four acquirers from complying with Regulation 11(1) of the Takeover Regulations with regard to the proposed preferential allotment of 2 crores equity shares of Balasore Alloys Limited, subject to compliance with the undertakings given by the target company and the acquirers.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ In the Matter Of Proposed Acquisition of Equity Shares of Balasore Alloys Limited May 17, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA

1.1 Balasore Alloys Ltd. (hereinafter referred to as ‘the target company’) is a company limited by shares incorporated under the Companies Act, 1956, having its registered office at Balgopalpur-756 020 Balasore Orissa. The equity shares of the target company are listed on the Bombay Stock Exchange Ltd. (BSE), Calcutta Stock Exchange Ltd. (CSE), Delhi Stock Exchange Ltd. (DSE) and the Bhubaneshwar Stock Exchange Limited (BhSE). 1.2 Goldline Tracom Pvt. Ltd., Ushaditya Investments Pvt. Ltd., Ispat Holdings Pvt. Ltd. and Mita Holdings Pvt. Ltd. (hereinafter referred to as ‘the acquirers’) belong to the promoter group of the target company. The acquirers hold 10.91% and the promoter group (including the acquirers) holds 27.47% in the total paid up capital of the target company. The acquirers propose to acquire 2 crores equity shares of the face value of Rs. 5 each of the target company by way of preferential allotment. Pursuant to the proposed allotment, the shareholding of acquirers would increase from 10.91% to 38.62% and the shareholding of promoter group (including the acquirers) would increase from 27.47% to 50.03% in the total paid up equity capital of the target company. 2.0 APPLICATION FOR EXEMPTION 2.1 Vide letter dated December 10, 2005, the acquirers filed an application with Securities and Exchange Board of India (SEBI) under regulation 4(2) read with regulation 3(1) (l) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, (Takeover Regulati

c. in terms of the CDR package , the promoters of the target company have to bring in fresh equity of Rs.22 crores, of which Rs. 10 crore to be brought in by April 2005, Rs. 5 crore in 2005-06, Rs. 5 crore in 2006-07 and Rs. 1 crore each during 2007-08 and 2008-09. d. such allotment would increase the promoters’ shareholding in the target company by 22.56% in one financial year, thereby triggering regulation 11 of the Takeover Regulations and therefore, the exemption is being sought through this application from complying with the provisions of the Takeover Regulations. e. the target company started incurring losses from the year 1999 – 2000 and made a reference to the Board of Industrial and Financial Reconstruction under section 15(1) of Sick Industrial Companies Act, 1985. 2.3 The shareholding pattern of the target company before and after the proposed preferential allotment is as under: Shareholders’ category Before

Source: SecMarx — sebi:WTMO/07/CFD/05/2006. 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.