Sebi exempts family trusts linked to 4 Vardhman cos from open offer obligations

New Delhi: Markets regulator Sebi on Friday exempted two trusts from making open offers following their proposed acquisition of shares in four companies, including and Vardhman Holdings. The order comes after Sebi received application from the trustees of SP Oswal Trust and Shakun Oswal Trust seeking exemption from the applicability of SAST rules in the matter of proposed acquisition of shares of Vardhman Textiles, , Vardhman Acrylics and Vardhman Special Steel.

The proposed acquisition involves indirect acquisition of shares of the four companies by trusts from promoter and members of promoter group.

Further, due to the fact that there is no direct acquisition in the four companies, the shareholding pattern of the firms before and after the acquisition will be the same.

SP Oswal jointly with Shakun Oswal exercise control over Devakar Investment and Trading Company and Adishwar Enterprises LLP.

“The proposed acquisition involves transfer of up to 10.66 lakh Class A equity shares and up to 10,600 Class B equity shares of Devakar (representing up to 55.82 per cent of class ‘A’ equity share capital and up to 46.49 per cent of class ‘B’ equity share capital) and up to 47.29 per cent share in profits of Adishwar, held by SP Oswal to SP Oswal Trust,” Sebi noted.

Also, the proposed acquisition involves transfer of up to 2.72 lakh class ‘A1’ equity shares and up to 400 class ‘B’equity shares of Devakar. It represents up to 14.27 per cent of class ‘A’ equity share capital and up to 1.75 per cent of class ‘B’ equity share capital. The proposed acquisition also involved a transfer of up to 35.17 per cent share in profits of Adishwar held by Shakun Oswal to Shakun Oswal Trust.

The proposed transactions will attract the obligation to make open offers under the SAST (Substantial Acquisition of Shares and Takeovers) rules or takeover regulations, and accordingly, exemption was sought from the regulator.

The exemption was sought on the ground that the proposed acquisitions are in furtherance to an internal reorganisation within the promoter family and are intended to streamline succession and promote welfare of promoter family.

In the order, Sebi said there will be no change in control of the firms pursuant to the proposed acquisitions.

The pre-acquisition and post-acquisition shareholding of the promoters and promoter group in the companies will remain the same. Besides, there will also be no change in the public shareholding of the firms.

Accordingly, the regulator has granted “exemption to the proposed acquirer, viz. SP Oswal Trust and Shakun Oswal Trust from complying with the requirements of of the Takeover Regulations, 2011 with respect to the proposed indirect acquisitions in the target companies (four companies) by way of proposed transactions”.

The exemption is subject to certain conditions, including compliance with the provisions of the Companies Act and other norms.

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