sebi:WTMO/TCN/CFD/20/July/2008

SEBI · SEBI · 2008-03-31 · T.C. Nair, Whole Time Member

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Facts / Headnote

Exemption granted from making public announcement under Regulation 11(2) of the Takeover Regulations in respect of the proposed buy-back; application dated 31-03-2008 disposed of.

Provisions invoked

• s. 19
• s. 77
• s. 77A

Regulations

• Reg. 4
• Reg. 11
• Reg. 4(2)
• Reg. 11(2)

Holding

SEBI granted exemption to the acquirers from making a public offer under Regulation 11(2) of the Takeover Regulations in respect of the consequential increase in their voting rights pursuant to the proposed buy-back of fully paid-up equity shares by Gujarat Flurochemicals Ltd. up to a maximum limit of 10% of its paid-up equity capital and free reserves from Rs.614.33 million proposed to be deployed in the said buy-back.

Full text

1.0 BACKGROUND – 1.1 Gujarat Flurochemicals Ltd. (hereinafter referred to as ‘the Target Company’) is a public company, having its registered office at S/No. 16/3, 26 & 27, Ranjit Nagar, Taluka Ghoghamba, District Panchmahals, Gujarat- 389380. The equity shares of the target company are listed on the Bombay Stock Exchange Ltd. (BSE) and the National Stock Exchange of India Ltd. (NSE). 2.0 APPLICATION FOR EXEMPTION:– 2.1 Inox Leasing and Finance Ltd. on its behalf and on behalf of the persons action in concert with it filed an application dated 31-03-2008 under regulation 4(2) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (hereinafter referred to as ‘the Takeover Regulations’). 2.2 Following persons are stated to be acting in concert with Inox Leasing and Finance Ltd.: (i) Devansh Trading and Finance Private Ltd., (ii) Hotz Industries Ltd., (iii) Inox Chemicals Private Ltd., (iv) Siddhapavan Trading and Finance Private Ltd. (v) Siddho Mal Investments Private Ltd., (vi) Mr. Devansh Jain, (vii) Mr. Devendra Kumar Jain, (viii) Mrs. Hem Kumari Jain, (ix)Mrs. Kamala Devi Jain, (x) Mr. Kapoor Chand Jain,

(xi) Mrs. Nandita Jain, (xii)Mrs. Nayantara Jain, (xiii) Mr. Pavan Kumar Jain, (xiv) Mr. Siddarth Jain, (xv) Mr. Vivek Kumar Jain; and (xvi) Mrs. Sita Devi Jain Inox Leasing and Finance Ltd. and the above persons acting in concert with it are hereinafter collectively referred to as ‘the acquirers’. 2.3 The acquirers have inter-alia made the following

the number of equity shares bought back would be more, assuming the deployment of Rs.614.33 million. d. The said buy-back proposal was made keeping the Target Company’s desire to maximize returns to investors. The proposed buy-back is expected to lead to reduction of outstanding equity shares which may lead to increase in earnings per share and thereby creating long term share holder value e. The closing prices of the shares of the Target Company as on 28-03-2008 at BSE was Rs.188.10 and at NSE it was Rs.187.15 respectively. f. The maximum price of Rs.300/- at which the buy-back will be carried out has been arrived at after considering certain parameters such as book value, earnings trend in the recent past, the future outlook for the industry and other relevant factors. g. The acquirers will not participate in the buy-back of equity shares. The Target Company shall not purchase any equity shares from the acquirers. h. After completion of the proposed buy-back the shareholding of the acquirers may increase from 66.45% to 67.64% of the voting rights of the Target Company. i. The acquirers are already in control over the Target Company. There would not be any change in control over the target company pursuant to the increase (1.19%) in the shareholding of the acquirers. j. The increase in the shareholding and voting rights of the acquirers in the Target Company is only incidental to the proposed buy-back offer and is not an active acquisition. k. Even after the buy-back of the

Source: SecMarx — sebi:WTMO/TCN/CFD/20/July/2008. 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.