SEBI exempts Southern Petrochem promoter from making open offer

The Securities and Exchange Board of India (SEBI) has exempted AMI Holdings from making an open offer regarding its acquisition of shares in Southern Petrochemical Industries Corp (SPIC), saying the transaction would not result in any change in control.

In its order dated February 22, the SEBI has exempted “the proposed acquirer, AMI Holdings Pvt Ltd, from the obligation to make an open offer... with respect to the proposed acquisition of equity shares pursuant to the conversion of 3.72 crore warrants.”

The promoter group of Southern Petrochemical Industries Corp (SPIC) holds 41.13 per cent of the voting capital, while AMI Holdings does not hold any shares in the firm as on date.

However, AMI Holdings is identified as a company belonging to the promoter group of SPIC which proposes to invest in the warrants to be issued by latter.

According to SEBI, Ashwin C Muthiah (a shareholder of SPIC under the category ‘promoter and promoter group’) holds 96 per cent of the capital and Valli Ashwin Muthiah holds 4 per cent capital of AMI Holdings.

“By virtue of the substantial shareholding of the promoter (Muthiah) of SPIC in AMI Holdings, latter becomes a ’promoter group’ entity of SPIC,” the SEBI said.

Following the conversion of warrants into equity shares, shareholding of the promoter and promoter group would increase from 41.13 per cent to 51.91 per cent, while individual holding of AMI Holdings would rise from nil to 18.31 per cent.

“...the allotment of warrants and their conversion into equity shares would not result in any change in control in the target company,” the SEBI said in its order.

“The consequential increase in the shareholding of the promoter/promoter group would also not disturb the minimum public shareholding levels in the target company,” it added.

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