The Securities and Exchange Board of India yesterday allowed investors to place the frozen shares of Indian Aluminum Company for the Hindalco open offer. The offer be valid from May 26.
As many as 9.8 lakh equity shares of Indal were stuck with Karvy Consultants Ltd, registrar to the 1998 abortive open offer by Sterlite Industries for acquiring the controlling interest in Indal.
Sterlite, which was supposed to have honoured the offer in 1998, failed to pick them up following the shareholders' refusal to pass the resolution allowing it to pick up the shares at an extraordinary general meeting.
The offer of Rs 221 per Indal share included an optionally convertible preference share (OCPS) component of Rs 90 each and a cash component of Rs 131 per share.
Sebi chairman D R Mehta told Business Standard that the decision to allow investors wishing to place these shares with Hindalco was taken to protect investor interest.
"Though it is not an omnibus order, investors who want to withdraw shares from the registrar for placing before Hindalco, have now been allowed to do so," Mehta said yesterday.
Following the imbroglio in June-July 1998, Sebi had showcaused Sterlite for failing to honour the offer. The regulator had directed the company to pay Rs 221 per share to those investors in cash, together with a 15 per cent interest.
However, the company moved the appellate authority on the issue, which again upheld the Sebi directive. Thereafter, the company moved the Delhi High Court, where the case is still pending.
In effect, the latest Sebi directive could also be beneficial to Sterlite. If all the investors stuck with the shares withdraw them, the problem will automatically be resolved.
Mehta said the choice was now before the investors whether they wished to get the shares released from Karvy and opt for the Hindalco offer. This decision, he said, had also been added to the Hindalco offer document for Indal shares.
Hindalco, 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 1152-crore Indal. After the public offer, Hindalco's stake in Indal will go up to 74.6 per cent. In the meantime, as the 9.8 lakh shares were frozen at the registrars' end, investors had complained heavily of a loss of liquidity and benefits accruing to those shares.
