Buy back Offer

| Updated on March 18, 2011 Published on March 18, 2011

Religare Capital Markets Ltd ("Manager to the Buyback") on behalf of HEG Ltd ("Target Company") has issued this Public Announcement ("PA") to the Equity Shareholders / Beneficial Owners of the equity shares of the Target Company, pursuant to the provisions of Regulations 8(1) read with 15(c) of the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998 including any statutory modifications and amendments from time to time ("Buy-back Regulations") and contains the disclosures as specified in Schedule II to the Buy-back Regulations.

Buy Back Offer:

The Board of Directors of the Company ("Board of Directors"), in accordance with the authorization by the Article 3 of the Articles of Association of the Company ("AoA") and pursuant to the resolution passed by it ("Board Resolution") at its meeting held on March 14, 2011 ("Board Meeting"), approved the Buy-back of its fully paid-up equity shares ("Buy-back") of the face value of Rs. 10 each ("Equity Shares") from the existing owners of Equity Shares other than the promoters, promoter group and persons who are in control of the Company ("Persons in Control") at a price not exceeding Rs. 350.00 per Equity Share ("Maximum Offer Price") payable in cash, for an aggregate amount not exceeding Rs. 67.50 Crores (the "Maximum Offer Size"). The Maximum Offer Price per Equity Share does not include brokerage costs, Securities and Exchange Board of India ("SEBI") turnover charges, taxes such as securities transaction tax, service tax and relevant stamp duty ("Transaction Costs"). The Maximum Offer Size of the Buy-back is inclusive of Transaction Costs. The Maximum Offer Size represents 9.95% of the aggregate of the Companys total paid-up equity capital and free reserves as on March 31, 2010 (the date of the latest standalone audited accounts) which is in compliance with the maximum permissible limit of 10.00% of the paid-up equity capital and free reserves in accordance with Section 77A(2) of the Companies Act, 1956 (the "Act"). The aggregate paid up capital and free reserves of the Company as at March 31, 2010 is Rs. 678.69 Crores.

The Buy-back will be implemented by the Company through the methodology of "Open market purchases through stock exchanges" using the electronic trading facilities of the Bombay Stock Exchange Ltd ("BSE") and the National Stock Exchange of India Ltd ("NSE") ("Stock Exchanges") in accordance with the provisions of Sections 77A, 77AA, 77B of the Act and other applicable provisions of the Act read with Article 3 of the AoA and the Buy-back Regulations, and subject to approval/s as may be necessary, from time to time, from statutory authorities including but not limited to, SEBI, Stock Exchanges, Reserve Bank of India ("RBI") etc. as may be required and further subject to such conditions as may be prescribed while granting such approvals which may be agreed to by the Board of Directors.

The actual number of Equity Shares bought back will depend upon the average price including Transaction Costs paid for the Equity Shares bought back and the aggregate consideration paid for the Buy-back subject to the Maximum Offer Size. During the Buy-back offer period the Company hereby proposes to Buy-back a minimum of 386,000 Equity Shares (the "Minimum Offer Shares") and an indicative maximum of 1,928,571 Equity Shares (the "Maximum Offer Shares") which is the maximum number of Equity Shares that can be bought back by the Company, at the proposed Maximum Offer Price per Equity Share and for an aggregate consideration amount of Rs. 67.50 Crores. If the Equity Shares are bought back at an average price below the Maximum Offer Price, the number of Equity Shares bought back could exceed the Maximum Offer Shares subject to the Maximum Offer Size. The Maximum Offer Shares are 4.50% of the pre Buy-back paid-up equity share capital of the Company at the Maximum Offer Price of Rs. 350.00 per Equity Share.

The fact that the Board Resolution provides for the Maximum Offer Price does not indicate that the Company will or is obliged to buy or continue to buy Equity Shares, so long as the market price is below the Maximum Offer Price. Similarly, the fact that the Board Resolution indicates the Maximum Offer Size not exceeding Rs. 67.50 Crores does not indicate that the Company will utilize or is obliged to utilize, the entire amount in the Buy-back or that the Company will buy or is obliged to buy all the Maximum Offer Shares.

As required under the Act and the Buy-back Regulations, the Company shall not purchase Equity Shares which are partly paid-up, Equity Shares with call-in-arrears, locked-in or non-transferable Equity Shares till the time they become fully-paid, or till the pendency of the lock-in or till the Equity Shares become transferable, as the case may be. There will be no negotiated deals (whether on or off Stock Exchanges), spot transactions or any other private arrangements in implementation of the Buy-back.

The Equity Shares are listed on the BSE, NSE and the Madhya Pradesh Stock Exchange Ltd ("MPSE") and the Buy-back of share will be made on the Stock Exchanges (i.e. BSE and NSE only) using the electronic trading facility.

Proposed Timetable:

Board Resolution approving the Buy-back - March 14, 2011

Date of Public Notice in Compliance with Regulation 5A of the Buy-back Regulations - March 15, 2011

Date of opening of the Buy-back - April 11, 2011*

Acceptance of Equity Shares - Within the relevant payout dates of the Stock Exchanges.

Extinguishment of Equity Shares - Within 15 days of acceptance as above.

Last Date for the Buy-back - March 13,2012 (i.e. 12 months from the date of the Board Resolution). However, the Board of Directors in its absolute discretion may decide to close the Buy-back at an earlier date in the event the Minimum Offer Shares have been purchased under the Buy-back, even if the Maximum Offer Size has not been reached, by giving appropriate notice of such date and completing all formalities in this regard as per relevant laws and regulations. There would be a completion of all payment obligations in respect of the Buy-back prior to the last date of the Buy-back.

Source : BSE - >www.bseindia.com

Published on March 18, 2011
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