sebi:WTMO/26/CFD/06/2006

SEBI · SEBI · 2006-03-29 · T. C. Nair, Member

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Facts / Headnote

Exemption granted from complying with Regulation 11(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997

Provisions invoked

• s. 19

Regulations

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

Holding

SEBI granted exemption to The Morgan Crucible Company Plc and Morganite Carbon Ltd. from complying with Regulation 11(1) of the Takeover Regulations with regard to the increase in their voting rights from 51.24% to 59.67%, consequent to the proposed buy-back offer of Assam Carbon Products Limited.

Full text

Home » Enforcement » Orders » Orders of Chairman/Members Enforcement Enforcement▼ In The Matter Of Proposed Acquisition Of Equity Shares Of Assam Carbon Products Limited Jun 29, 2006 | Orders : Orders of Chairman/Members SECURITIES AND EXCHANGE BOARD OF INDIA

office at Birkuchi, Guwahati, Assam – 781 026. The equity shares of the target company are listed on the Kolkata Stock Exchange Ltd. and Guwahati Stock Exchange Ltd. 1.2 The Morgan Crucible Company Plc and Morganite Carbon Ltd. (hereinafter referred to as ‘the acquirers’) are foreign promoters of the target company and are presently holding 51.24% of the equity shares of the target company. 2.0 APPLICATION FOR EXEMPTION - 2.1 The target company has announced its plan to buy-back its shares from the shareholders and due to the said buy-back offer, the voting rights of the acquirers would increase from 51.24% to 59.67%, in case of 100% response to the said buy-back offer and the acquires not offering to sell any shares held by them in the proposed buy-back offer of the target company. 2.2 Vide letter dated March 29, 2006, the acquirers filed an application with the Securities and Exchange Board of India (SEBI) under regulation 4(2) read with regulation 3(1) (l) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,1997, (hereinafter referred to as the ‘Takeover Regulations’). Since, the post buy-back shareholding of acquirers may increase to a level beyond 55%, the exemption is sought from the applicability of regulation 11(1) of the Takeover Regulations, inter alia on the following grounds:- a) The acquirers are foreign promoters of the target company and hold 51.24% of the share capital of the target company and they are in control over the target company. b)

minimum public shareholding in target company shall remain at a level more than 40%. e) The equity shares of the target company are not frequently traded on both the stock exchanges and the proposed buy-back offer will give the shareholders of the target company an opportunity to exit at a price determined as per the method which is similar to the method provided in Takeover Regulations. f) The price at which the buy-back is proposed is Rs. 80/- and is higher than the book value of Rs. 45.76 per share (as on 31st March 2005). g) The acquirers do not propose to acquire a single share of the target company and the increase in their shareholding in the target company from 51.24% to 59.67% is only incidental to the proposed buy-back offer assuming 100% response in the said buy-back offer. h) There would not be any change in control over the target company pursuant to the increase in the shareholding of the acquirers. i) The acquirers will not offer any share held by them in the buy-back offer for the reason that in addition to being major shareholders, they are also the Technical Collaborators and have provided technology to the target company. j) The acquirers had increased their shareholding in the target company to the majority level at the time of providing technical know-how. The performance as well as future growth of the target company depends entirely upon the technical as well as day-to-day management support of the acquirers. k) The acquirers are world leaders in carbon

Source: SecMarx — sebi:WTMO/26/CFD/06/2006. 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.