SEBI Takeover

7/29/2019 SEBI Takeover

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SEBI Takeover code


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The takeoverregulations are applicable

on the acquisition ofvotingrights or control over thelisted company


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PACs - persons who for a common objectiveof substantial acquisition of shares or votingrights or gaining control over the target

company, directly or indirectly co-operate byacquiring or agreeing to acquire shares orvoting rights in or control over the targetcompany.


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SEBI TakeoverRegulations, 1997

15%

SEBI TakeoverRegulations, 2011

25%

CREEPING ACQUISITION ZONE REDEIFINED

SEBI Takeover

Regulations, 1997

15% -

55%

SEBI Takeover

Regulations, 2011

25% -

75%

CreepingAcquisition5% in each FY


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Eligibility1. Prior holding of atleast 25% or more shares

2. No acquisition during the preceding 52 weekswithout attracting the obligation to make a public

announcementRestrictionNo further acquisition of shares for a

period of 6 months after completion of the openoffer except by way of another voluntary openoffer or competing offer


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Opening- Not later than two working days Amount of Escrow deposit

Forms of Escrow accountCashBank GuaranteeFreely transferable equity shares orsecurities


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Once a shareholder has tendered his sharesin the open offer made by the acquirer, thenhe/she cannot withdraw or revise his/herrequest


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1. Appointment of Merchant Banks2. Public announcement3. Filing letter of offer with SEBI4. Minimum offer price5. Minimum public offer6. Obligation of the board of target

company/merchant banker7. Withdrawal of offer8. Escrow account9. competitive bids


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Facts:Mr. HP Agarwal along with persons acting in concert with

him (acquirers) are part of the promoter group of Secur industriesLtd and currently holds713207 equity shares of the target companyconstituting 17.49% of its paid up capital

Now the acquirers proposes to acquire 12lakh equity sharesby way of preferential allotment and 10lakh warrants(convertibleinto equity shares) thereby increasing the holding of the acquirersfrom 17.49% to 46.40% of post conversion of warrants resultinginto mandatory regulations of SEBI takeover code. Therefore, theacquirers have filed this present application seeking the exemption

from the applicability of SEBI takeover code grounds of exemptionas hereafter


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No change in control Target company owes unsecured loan of

Rs.1.20 crore to the acquirers. However dueto the loss for last many years, it was not in a

position to pay of such debts Thus to review the financial position and to

meet the long term and short term workingcapital requirements, it proposes to convert

the unsecured loan into equity shares and toinduce further funds by way of preferentialallotment


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The application was presented to the takeoverpanel who directed the target company to onceagain pass the resolution through the postalballot and thereafter approach SEBI forexemption. Accordingly after passing the

resolution, the acquirers have once againapproached the SEBI. The said application wasonce again forwarded to takeover panel forconsideration. On the basis of above facts andcircumstances and considering present financialposition of the target company. Takeover panelrecommended the case for exemption and SEBIalso accepted its recommendation


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SEBI Takeover

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