Ingersoll Rand seeks SEBI exemption to buy back up to 25 per cent equity
25 Mar 2009
Ingersoll-Rand (India) is planning to buy back up to 25 per cent of its stake from the public, which would take the US company's voting rights in its Indian arm to 75 per cent, but the company wants an exemption from the SEBI takeover rules that makes an open offer for another 20 per cent shares mandatory.
Ingersoll-Rand (India) Ltd has announced that a meeting of its board of directors held on 24 March, has approved the buy-back of shares of a maximum limit of up to 25 per cent of the net worth of the company, subject to receipt of an appropriate exemption for Ingersoll-Rand USA from making an open offer.
The board noted that Ingersoll-Rand USA does not intend to participate in the proposed buy back. Accordingly, reasonable levels of tender by the public shareholders of the company would result in IR USA's voting rights in the company to exceed 75% of the total voting rights in the company and that IR USA would be required to make an open offer under Regulation 11(2) of the Securities Exchange Board of India.
The board noted that the Ingersoll-Rand USA does not intend to participate in the proposed buy-back. Accordingly, reasonable levels of participation or tender by the public shareholders of the company would result in Ingersoll-Rand USA's voting rights in the company to exceed 75 per cent of the total voting rights in the company and that the US parent would be required to make an open offer under Securities Exchange Board of India (Substantial Acquisition of Shares & Takeover) Regulations, 1997, in the absence of a special exemption, which it is intending to seek from the takeover panel.
The company said its board has decided that the time to determine the price would be on Ingeroll-Rand USA receiving the exemption from making an open offer and after obtaining requisite approvals from the shareholders.
The stock was trading at Rs272.90, down by Rs13.95 or 4.86 per cent. The stock hit an intraday high of Rs.299 and low of Rs.269.10.
The total traded quantity was 97841 compared to 2 week average of 77356.
