 "Sebi acts in Digvijay Cements case")
Sebi said this in a response to a Right To Information (RTI) query from an aggrieved shareholder of SDCCL. The makers of Kamal cement were acquired through a complex transaction in 2013 and the open offer was delayed by 81 days. “You may note that Sebi has already initiated proceedings against the acquirer and PAC for the delay,” the regulator said in a reply to Surat-based Rustom Morena, a shareholder.
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The letter of offer acknowledges an 81-day delay in making it. Morena and some other shareholders have been contending the delay worked against them. They argue the value of the assets that have changed hands is much higher and demand a new open offer at the negotiated price at which the shares of the Indian company changed hands. The negotiated price is hidden in a complex restructuring process that took place between SDCCL’s erstwhile parent, Cimpor, and Votorantim immediately before the announcement of an open offer, investors say.
Had the open offer been made in time, they contend, the valuation would have been better. “This should be at the negotiated price, which is much higher,” Morena said. According to him, this could be up to five times the $20 a tonne value assigned at the open offer price.
The company’s position was that there was no discrepancy in the open offer price and no separate valuation was done for SDCCL, since it was valued as a part of Cimpor. As of December 2011, Cimpor Inversiones SA, a Cimpor entity, held 73.63 per cent in SDCCL.
In March 2012, Brazilian construction major Camargo Correa, with subsidiary Intercement Austria, which owned 33 per cent in Cimpor, mounted a takeover bid by offering to buy the remaining shares under Portugese takeover laws. This announcement triggered an open offer for SDCCL under Indian takeover law. But the acquirer did not announce any open offer at this stage. The regulations require an open offer to be made within four days.
Votorantim, which had bought 21.2 per cent of the shares in Cimpor around the same time Camargo picked up stake, did not tender its holding for sale in the Camargo offer. Following this, in June 2012, Votorantim and Camargo got into a restructuring agreement wherein they split the assets of Cimpor, scattered across the globe in South America, Angola, Turkey Morocco and India. In exchange for these assets, Votorantim surrendered its 21.2 per cent stake in Cimpor to Camargo. Pursuant to this agreement, SDCCL shares went to Votarantim.
Valuers Morgan Stanley and Rothschild valued the total assets transferred to Votarantim at €817 million (Rs 5,720 crore) but not give a valuation of individual assets.