 "RInfra acquires stake in Pipivav Defence")
Reliance Infrastructure’s (RInfra) Rs 1,263-crore open offer for the acquisition of Pipavav Defence & Offshore Engineering Co (PDOC) was under-subscribed. The response to the offer, which was closed on Tuesday, was limited to 17 per cent as against an offer to acquire 26 per cent of share capital. Post this offer, RInfra will now own 35 per cent of Pipavav Defence and acquire sole management control of the company. Sources associated with the open offer said major institutional investors have not opted for the open offer but decided to stay invested in the company.
The mandatory open offer to acquire up to 26 per cent shares from the public shareholders of the Pipavav was at a price of Rs 66 per share in terms of applicable Securities and Exchange Board of India (Sebi) takeover regulations. Recently, Pipavav Defence also announced its plans to exit the corporate debt restructuring (CDR) package, post RInfra open offer.
RInfra spokesman said, “Upon completion of applicable formalities, RInfra will acquire sole management control of PDOC, and the Board of PDOC will be reconstituted, together with the company being renamed Reliance Defence and Engineering. The payment for validly tendered shares, subject to scrutiny and processing, will be completed by December 31, 2015.
Pipavav Defence share on NSE closed at Rs 76.10 up 16.81 per cent, while RInfra at Rs 435 up 2.8 per cent.
In March, RInfra together with its wholly-owned subsidiary Reliance Defence Systems Private Limited had agreed to acquire from the promoters of Pipavav Defence 13,00,00,000 equity shares representing 18 per cent shareholding in the company at a price of Rs 63 per share, aggregating Rs 819 crore.
