Description
Presentation on Delisting Regulations
DEFINITIONS
ACT COMPANY PUBLIC SHAREHOLDERS BOARD COMPULSORY DELISTING RECOGNISED STOCK EXCHANGE
SCHEDULE
WORKING DAYS PERSON ACTING IN CONCERT PUBLIC SHAREHOLDING
VOLUNTARY DELISTING
CONTROL PROMOTER
APPLICABILITY
?
Applicable to companies who want to delist their equity share from all or any of the recognized SE Not applicable if scheme is sanctioned by BIFR under SIC Act only if such scheme lays down specific procedure for delisting or provides an exit option to existing shareholders
?
DELISTING NOT ALLOWED WHEN…
?
Following buy back, preferential allotment Unless 3 years has elapsed until listing of that class of equity shares Convertible issues are outstanding
?
?
VOLUNTARY DELISTING DELISTING FROM ALL RECOGNISED SE
?
Provided that all public shareholders holding equity shares of the class which are sought to be delisted are given an exit opportunity.
DELISTING FROM SOME RECOGNISED SE
?
After delisting shares should remain listed on a nation wide recognised SE. If not so, then an exit option should be given to the existing shareholders
?
CONTD.. (IF NO EXIT OPTION IS GIVEN)
?
Delisting shall be approved by resolution of the BOD. Give public notice of proposed delisting Make application to the concerned SE
?
?
?
Facts about delisting shall be disclosed in the 1st annual report after delisting
IF EXIT OPTION IS GIVEN..
?
Obtain prior approval of BOD For approval of public shareholders pass a special resolution with 2/3rd majority Within 1 year of this make application to the concerned SE
?
?
EXIT OPPORTUNITY (1)
Public Announcement ? English National Daily, Hindi National Daily, Regional language Newspaper of the concerned RSE. ? ‘Specified Date’ for the determination of names of shareholders eligible. Escrow Account ? The promoter shall deposit total estimated amount based on floor price before making the public announcement. ? The remaining amount (if any) will be deposited when the final price is determined. ? It can consist of cash with any SCB or bank guarantee or combination of both. Letter of Offer ? It should be dispatched within 45 days of public announcement. ? Should be dispatched to all shareholders whose name appear in the list as on the specified date ? It should have all the necessary disclosures along with bidding form.
EXIT OPPORTUNITY (2)
Bidding Period ? Date of opening shall not be more than 55 working days from the date of public announcement. ? It shall remain open for minimum 3 working days and maximum 5 working days. Right of Participation ? All public shareholders. ? Promoter or PAC shall not make a bid. Determination of Floor Price ? When shares are frequently traded in all RSE where it is listed – the higher of 26 weeks and 2 weeks one rule ? When shares are infrequently traded in all RSE where it is listed – highest price paid by promoter for acquisition during the prior 26 weeks along with other parameters as RONW, BV, EPS, P/E v/s Industry average. ? When shares are infrequently traded on some RSE and frequently on other RSE – Highest of the price arrived by both the methods.
Right of Promoter not to accept the offer price ? Promoter has the right not to accept the offer price. ? The shares pledged shall be returned or released within 10 working days, Escrow a/c can be closed. Min. Equity Shares to be acquired ? 90% of total issued shares of that class excluding the shares held by custodian and against which depository receipts have been issued overseas; or ? Aggregate percent of pre offer promoter shareholding (along with PAC) and 50% of offer size Procedure after closure of offer ? Within 8 working days of closure of offer, public announcement shall be made in newspaper regarding failure or success of offer with final price.
Success of offer ? Open a special account with banker to an issue registered with the Board and transfer the entire amount due and payable in respect of equity shares tendered in the offer from the escrow account ? All the shareholders will be paid the final price stated in public announcement within 10 working days from closure of the offer Failure of offer ? Offer will be deemed to be fail if rejected under regulation 16 or 17 ? Equity shares pledged by shareholder shall be returned to him within 10 working days from the end of bidding period ? No final application for delisting shall be made to the exchange ? Escrow account will be closed
COMPULSORY DELISTING - STOCK EXCHANGE (1)
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Section 21A of the Securities Contracts (Regulation) Act, 1956 Panel taking decision consists of –
• • • •
2 directors of recognised stock exchange 1 representative of investors 1 representative of MCA or Registrar of Companies ED or Secretary of recognised stock exchange
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Stock exchange shall consider representations, if any, made by the company received in response to the notice given Publish notice in one English national daily and one regional language newspaper of region where the concerned recognised stock exchange is located, disclosing name and address of the company, fair value of delisted equity shares and names and addresses of promoters of the company
COMPULSORY DELISTING - STOCK EXCHANGE (2)
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Inform all other stock exchanges where the equity shares of the company are listed about delisting Stock exchange shall appoint independent valuer who shall determine the fair value of delisted equity shares The promoter of company shall acquire delisted equity shares from the public shareholders by paying them the value determined by the valuer, subject to their option of retaining their shares The company, its whole time directors, promoters and the companies which are promoted by any of them shall not directly or indirectly access the securities market or seek listing for any equity shares for a period of 10 years from the date of such delisting
SPECIAL PROVISIONS FOR SMALL COMPANIES AND DELISTING BY OPERATION OF LAW
Provisions for small companies 1. Paid up capital up to 1 crore Shares are not traded in last one year 2. < 300 shareholders paid up capital held by public < 1 crore 3. Appoint merchant banker and discuss delisting price Promoters ? all shareholders ( seeking consent ) At least 90% shareholders ? +Ve consent finalization of proposal? 75 working days after 1st communication Payment ? 15 working days Winding up ,derecognition
Board ? withdraws recognition granted to the stock exchange pass order ? status of equity shares listed
MISCELLANEOUS
Recognized stock exchange to monitor regulation
Stock exchange ? report to the board of any instance of non compliance
Listing of delisted equity shares
1.
No application delisted under chapter III / IV – 5 years from delisting chapter V – 10 years from delisting
Transitional provision
guidelines ? Securities and Exchange board of India (delisting of securities ) guidelines ,2003
THANK YOU
doc_466376608.pptx
Presentation on Delisting Regulations
DEFINITIONS
ACT COMPANY PUBLIC SHAREHOLDERS BOARD COMPULSORY DELISTING RECOGNISED STOCK EXCHANGE
SCHEDULE
WORKING DAYS PERSON ACTING IN CONCERT PUBLIC SHAREHOLDING
VOLUNTARY DELISTING
CONTROL PROMOTER
APPLICABILITY
?
Applicable to companies who want to delist their equity share from all or any of the recognized SE Not applicable if scheme is sanctioned by BIFR under SIC Act only if such scheme lays down specific procedure for delisting or provides an exit option to existing shareholders
?
DELISTING NOT ALLOWED WHEN…
?
Following buy back, preferential allotment Unless 3 years has elapsed until listing of that class of equity shares Convertible issues are outstanding
?
?
VOLUNTARY DELISTING DELISTING FROM ALL RECOGNISED SE
?
Provided that all public shareholders holding equity shares of the class which are sought to be delisted are given an exit opportunity.
DELISTING FROM SOME RECOGNISED SE
?
After delisting shares should remain listed on a nation wide recognised SE. If not so, then an exit option should be given to the existing shareholders
?
CONTD.. (IF NO EXIT OPTION IS GIVEN)
?
Delisting shall be approved by resolution of the BOD. Give public notice of proposed delisting Make application to the concerned SE
?
?
?
Facts about delisting shall be disclosed in the 1st annual report after delisting
IF EXIT OPTION IS GIVEN..
?
Obtain prior approval of BOD For approval of public shareholders pass a special resolution with 2/3rd majority Within 1 year of this make application to the concerned SE
?
?
EXIT OPPORTUNITY (1)
Public Announcement ? English National Daily, Hindi National Daily, Regional language Newspaper of the concerned RSE. ? ‘Specified Date’ for the determination of names of shareholders eligible. Escrow Account ? The promoter shall deposit total estimated amount based on floor price before making the public announcement. ? The remaining amount (if any) will be deposited when the final price is determined. ? It can consist of cash with any SCB or bank guarantee or combination of both. Letter of Offer ? It should be dispatched within 45 days of public announcement. ? Should be dispatched to all shareholders whose name appear in the list as on the specified date ? It should have all the necessary disclosures along with bidding form.
EXIT OPPORTUNITY (2)
Bidding Period ? Date of opening shall not be more than 55 working days from the date of public announcement. ? It shall remain open for minimum 3 working days and maximum 5 working days. Right of Participation ? All public shareholders. ? Promoter or PAC shall not make a bid. Determination of Floor Price ? When shares are frequently traded in all RSE where it is listed – the higher of 26 weeks and 2 weeks one rule ? When shares are infrequently traded in all RSE where it is listed – highest price paid by promoter for acquisition during the prior 26 weeks along with other parameters as RONW, BV, EPS, P/E v/s Industry average. ? When shares are infrequently traded on some RSE and frequently on other RSE – Highest of the price arrived by both the methods.
Right of Promoter not to accept the offer price ? Promoter has the right not to accept the offer price. ? The shares pledged shall be returned or released within 10 working days, Escrow a/c can be closed. Min. Equity Shares to be acquired ? 90% of total issued shares of that class excluding the shares held by custodian and against which depository receipts have been issued overseas; or ? Aggregate percent of pre offer promoter shareholding (along with PAC) and 50% of offer size Procedure after closure of offer ? Within 8 working days of closure of offer, public announcement shall be made in newspaper regarding failure or success of offer with final price.
Success of offer ? Open a special account with banker to an issue registered with the Board and transfer the entire amount due and payable in respect of equity shares tendered in the offer from the escrow account ? All the shareholders will be paid the final price stated in public announcement within 10 working days from closure of the offer Failure of offer ? Offer will be deemed to be fail if rejected under regulation 16 or 17 ? Equity shares pledged by shareholder shall be returned to him within 10 working days from the end of bidding period ? No final application for delisting shall be made to the exchange ? Escrow account will be closed
COMPULSORY DELISTING - STOCK EXCHANGE (1)
? ?
Section 21A of the Securities Contracts (Regulation) Act, 1956 Panel taking decision consists of –
• • • •
2 directors of recognised stock exchange 1 representative of investors 1 representative of MCA or Registrar of Companies ED or Secretary of recognised stock exchange
? ?
Stock exchange shall consider representations, if any, made by the company received in response to the notice given Publish notice in one English national daily and one regional language newspaper of region where the concerned recognised stock exchange is located, disclosing name and address of the company, fair value of delisted equity shares and names and addresses of promoters of the company
COMPULSORY DELISTING - STOCK EXCHANGE (2)
? ? ?
?
Inform all other stock exchanges where the equity shares of the company are listed about delisting Stock exchange shall appoint independent valuer who shall determine the fair value of delisted equity shares The promoter of company shall acquire delisted equity shares from the public shareholders by paying them the value determined by the valuer, subject to their option of retaining their shares The company, its whole time directors, promoters and the companies which are promoted by any of them shall not directly or indirectly access the securities market or seek listing for any equity shares for a period of 10 years from the date of such delisting
SPECIAL PROVISIONS FOR SMALL COMPANIES AND DELISTING BY OPERATION OF LAW
Provisions for small companies 1. Paid up capital up to 1 crore Shares are not traded in last one year 2. < 300 shareholders paid up capital held by public < 1 crore 3. Appoint merchant banker and discuss delisting price Promoters ? all shareholders ( seeking consent ) At least 90% shareholders ? +Ve consent finalization of proposal? 75 working days after 1st communication Payment ? 15 working days Winding up ,derecognition
Board ? withdraws recognition granted to the stock exchange pass order ? status of equity shares listed
MISCELLANEOUS
Recognized stock exchange to monitor regulation
Stock exchange ? report to the board of any instance of non compliance
Listing of delisted equity shares
1.
No application delisted under chapter III / IV – 5 years from delisting chapter V – 10 years from delisting
Transitional provision
guidelines ? Securities and Exchange board of India (delisting of securities ) guidelines ,2003
THANK YOU
doc_466376608.pptx