Hirco, an India-focused property firm listed on the London Alternative Investment Market (AIM), said it was deferring a plan for a reverse takeover of its holding companies as it failed to convene its shareholders’ meet within the stipulated time to approve the merger.
Hirco failed to arrange the shareholders' meet to approve the merger at least 28 days prior to the February 28 deadline, according to the Mauritius rules, where the investment holding firm Hirco Holdings is based.
"The clock has run out,’’ Hirco Executive Director Aniruddha Joshi said today."We continue to hold discussions with the stakeholders.’’
Last month, the investment vehicle of the Mumbai-based realtor, Hiranandani group, had adjourned its extraordinary general meeting (EGM) scheduled to be held on January 16.
The EGM was to discuss Hirco's proposed merger with two other companies of the Hiranandani group -- Hirco Developments and Hiranandani Investment Companies. The EGM was deferred owing to stiff resistance from shareholders, including Laxey Partners, as the restructuring plan was likely to dilute their interests and effectively cede control to the Hiranandani family. Hirco also managed to wrest concessions from the founders in terms of stepping up cash flows as soon as they arise.
The group agreed to declare dividends and equivalent to any cash flows coming out of the project.
"Subject only to Hirco plc's own working capital requirements, it is committed to Hirco plc paying dividends equivalent to any cash flows it receives from the Hiranandani Investment Companies,’’ the company said in a statement.
Additionally, the Hiranandani group also agreed to annul an exclusivity agreement with Hirco, which essentially means that Hirco will not participate in future projects being undertaken by the group.
