The Securities & Exchange Board of India (Sebi) will decide tomorrow whether 9.80 lakh shares of Indian Aluminium Company (Indal) could be furnished under the open offer by Hindalco.
The shares have been under dispute following an abortive bid by Sterlite Industries to take control of Indal in mid-1998.
The market regulator will meet representatives of Sterlite and Karvy Consultants tomorrow, a source associated with the deal said. The shares had been lodged with Karvy Consultants, the registrar to the Sterlite open offer.
More From This Section
These shares, which were submitted by ordinary investors under the Sterlite open offer for taking over the city-based aluminium major, were frozen by Sebi after Sterlite withdrew its offer.
If Sebi lifts the freeze on these shares, the investors would tender the shares under the Hindalco open offer, which will remain open for a month from Friday.
Hindalco, it may be recalled, has come out with an open offer to acquire a 20 per cent stake in Indal at Rs 190 a share. The Kumar Mangalam Birla group-controlled aluminium company has already acquired Alcan's entire 54.6 per cent shareholding in the Rs 1,152-crore Indal. After the public offer, Hindalco's stake in Indal will go up to 74.6 per cent.
Sterlite had made a bid for Indal in June 1998 by offering a final price of Rs 221 per share, including a cash component of Rs 131 and an optionally convertible preference share (OCPS) component of Rs 90 each.
According to Section 81 (1A) of the Companies Act, 1956, the issue of optionally convertible preference shares requires approval of shareholders. Since the approval was not granted by Sterlite's shareholders, the company withdrew the offer but not before 9.80 lakh shares had already been lodged by minority shareholders with Karvy Consultants.
Sebi ordered Sterlite to honour its commitment and froze on the escrow account for the open offer and asked Karvy not to release the shares.