Financial Daily from THE HINDU group of publications
Tuesday, Jul 16, 2002
Financial Daily from THE HINDU group of publications Tuesday, Jul 16, 2002 |
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Buyback Corporate - Buyback HC okays Sterlite arrangement Our Bureau
MUMBAI, July 15 STERLITE Industries (India) Ltd today informed that the Bombay High Court had upheld the scheme of arrangement between the company and its equity shareholders, which envisaged purchasing up to 50 per cent of Sterlite's equity capital from its existing shareholders. A statement from Sterlite said the Court in its judgement decreed that Section 391 of the Companies Act, 1956 which governs Sterlite's buyback scheme is distinctly independent of Section 77A of the Companies Act, 1956. "As regards shareholders who have not responded in any way, the Court has accepted the company's proposal of providing a safety net. Essentially, the safety net proposal envisages holding in trust for such shareholders the purchase consideration due to them against the sale of their shares.'' "Within a period of three months, any such shareholder who had not responded to the company's offer nor accepted the consideration may communicate to the company of his desire to continue as a shareholder.'' "The company will then make available to such shareholders equivalent number of shares as the shares which have been purchased from him against surrender by the shareholder of the consideration held in trust for him,'' the company's statement said. A copy of the Court order could not be had. The Investor Grievances Forum (IGF) sought mediation from SEBI and Department of Company Affairs (DCA), saying Sterlite had gone beyond the Court approved scheme by issuing cheques in advance to investors. On June 17, Sterlite clarified that its scheme of arrangement to purchase 50 per cent of its equity stake was voluntary. Company officials pointed out that investors were given the option to reject the scheme by returning an option form. Mr Tarun Jain, Director (Finance) of Sterlite, said that until then the company had got 4,000 forms seeking to opt out of the scheme translating to 1.5 per cent stake. On the other hand, Sterlite had garnered 25 per cent stake. Mr Jain added that FIs, including LIC and GIC, which opposed the scheme had not opted for it. The FI stake was around 7 per cent. The promoters hold roughly 43 per cent. "The intention to delist Sterlite stock from local bourses is to go for a primary listing overseas so that we are able to raise funds for our expansion activities,'' Mr Jain had said then. The scheme of arrangement was slated to end on June 21. An update on the final quantum of buyback could not be had today, the company feedback being that it would take time to tally the figures.
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