SEBI weighs exemption for Telecanor promoter to avoid public offer

The exemption is sought to allow her to acquire additional shares in Telecanor Global Limited via preferential allotment to infuse funds for settling the company's debt obligations.

Who it concerns: Ms. Vijay Lakshmi Praturi (Proposed Acquirer), Telecanor Global Limited (Target Company), Mr. Marutiram Praturi (Promoter), Phoenix Asset Reconstruction Company Private Limited (PARCPL), Dhanlaxmi Bank.

What SEBI found or ordered

• Application filed for exemption from sub-regulations (1) and (2) of regulation 3 and regulation 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
• Proposed acquisition involves allotment of 30,00,000 equity shares and 40,00,000 convertible share warrants to the Proposed Acquirer.
• Proposed Acquirer's shareholding would increase from 13.31% to 31.38% (and potentially 42.39% upon warrant conversion).
• Target Company has an outstanding One Time Settlement (OTS) obligation of INR 2,25,00,000 to Phoenix Asset Reconstruction Company Private Limited (PARCPL).
• Proposed Acquirer stated she cannot afford the estimated INR 2 Crores cost of making a public announcement and open offer.
• The order text provided is truncated and does not contain SEBI's final decision (grant or rejection) on the exemption application.

Also in the document

• The Target Company is described as having been consistently loss-making and having failed to pay lenders in the past, leading to a Non-Performing Asset (NPA) status with Dhanlaxmi Bank in 2011.
• The Proposed Acquirer is a promoter and spouse of another promoter, Mr. Marutiram Praturi; together they hold 22.99% of the company before the proposed transaction.
• The application argues that without the exemption, the capital infusion would be insufficient to settle the PARCPL debt, potentially leading to insolvency.