Penny Stock Open Offer: At 20 per cent premium for a consideration of Rs 15.83 crore
The board in its meeting on July 29, 2024, approved a preferential allotment of 3,00,00,000 equity shares at Rs 14.33 each
Introduction
Kunvarji Finstock Pvt. Ltd., on behalf of Mr. J Rafiq Ahmed, announced an open offer to acquire a significant stake in Kothari Industrial Corporation Limited (KICL). This offer is in line with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The announcement marks a pivotal moment for KICL a penny stock.
Key Details of the Offer
Offer Size: The acquirer intends to acquire up to 1,10,45,811 equity shares, representing 26% of KICL's expanded voting equity share capital.
Offer Price: Each share will be purchased at Rs 14.33, aggregating to a total consideration of Rs 15.83 crores, assuming full acceptance. This offer price represents a premium over the current market price of KICL shares, which is Rs 11.93.
Premium Over Market Price: The offer price of Rs 14.33 per share is approximately 20 per cent higher than the current market price of Rs 11.93 per share.
Payment Mode: The offer price will be paid in cash.
Type of Offer: This is a Triggered Open Offer in compliance with Regulations 3(1) and 4 of the SEBI (SAST) Regulations, 2011, initiated due to the proposed preferential allotment of shares.
Background of the Acquisition
The board of KICL, in its meeting on July 29, 2024, approved a preferential allotment of 3,00,00,000 equity shares at Rs 14.33 each. Out of these, 2,00,00,000 shares will be allotted to Mr. J Rafiq Ahmed, resulting in his holding of 47.08 per cent of the expanded voting equity share capital. Post this preferential allotment and the open offer, Mr. Ahmed's stake could increase to 73.08 per cent.
Implications for KICL
Management Control: With this acquisition, Mr. Ahmed will gain significant control over KICL's management and operations.
Promoter Group: Mr. Ahmed will become a part of the promoter group, reinforcing his influence on the company's strategic direction.
Regulatory Compliance
This offer complies with the SEBI (SAST) Regulations, 2011, ensuring transparency and fairness in the acquisition process. The detailed public statement and the letter of offer will provide further specifics and are expected to be issued within the stipulated time frame.
Next Steps
The shareholders' consent for the proposed preferential allotment will be sought in an extraordinary general meeting scheduled for August 21, 2024. Shareholders are encouraged to review the detailed public statement and the letter of offer to understand the terms and conditions thoroughly.
Disclaimer: The article is for informational purposes only and not investment advice.