SEBI denies exemptions
Ingersoll Rand USA, an air solutions firm, has announced it will not be proceeding with the buy-back proposal of its Indian arm in which it holds 74 per cent.
Ingersoll Rand India in a statement said its parent has withdrawn the application made to the takeover panel of the Securities & Exchange Board of India (SEBI) seeking special exemption from making an open offer.
“Since the basic condition for proceeding with the buy-back viz. receipt of an appropriate exemption for IR USA from making an open offer, from the takeover panel, no longer exists, the board of directors in their meeting held on April 28, 2010, have decided that the buy-back proposal cannot be proceeded with,” the statement added.
According to industry information, Ingersoll Rand had approved the buy-back of shares to an extent of 25 per cent of the net worth subject to appropriate exemptions from the takeover panel for IR-USA from making an open offer.
“However, in case of reasonable levels of participation or tender by public shareholders of the company, the voting rights of the parent firm would exceed 75 per cent of the voting rights of the company. This would require the parent to make an open offer as per provision of the SEBI Regulations 1997. However, the parent does not intend to participate in the buy-back and thus had applied for special exemptions from the takeover panel for making an open offer,” an industry analyst detailed.
This is the second time around the US-based firm has failed. During August 2005, the company had made an offer to delist the Indian arm at Rs 325 per share.
Ingersoll - Rand India on Wednesday reported a 27 per cent drop in net profit to Rs 49.3 crore for FY10 on a topline of Rs 381 crore for FY10, a drop of 3.5 per cent. Ingersoll Rand India’s stock closed down 0.45 per cent at Rs 363.15 per share on National Stock Exchange.
