This one is for Blogreader Salafi from Chennai ~ Goldstone Infratech @ Rs 10 ~ Open Offer at Rs 23 or at Rs 43 ? Supreme Court will decide ~ but it is a Win-Win either way

This one is for Blogreader Salafi from Chennai ~ Goldstone Infratech @ Rs 10 ~ Open Offer at Rs 23 or at Rs 43 ? Supreme Court will decide ~ but it seems a Win-Win either way.

Background of the Open Offer

On November 4,2008 Saffron Capital Advisors of Mumbai ,as Manager to the Offer and on behalf of the Board of Directors of Goldstone Exports Ltd (GEL) the Acquirer (now Trinity Infraventures),issued  a Public Announcement in the Newspapers that the Acquirer makes an Open Offer for 20% of the Equity of Listed Goldstone Infratech Ltd (GIL) (erstwhile GoldstoneTeleservices) at the Price of Rs 23 per share

On December 16,2008 SEBI advices the Acquirer to use October 29,2008 as the Reference Date to determine the Offer Price

It was on this Date when Shares were allotted to GEL on conversion of the Share Warrants they held ~ The Offer Price arrived at  was Rs 43

GEL had used the Reference Date of January 25,2007 when the Board of GIL had decided to issue 1.5 cr Share Warrants to GEL which could be converted into Shares at Rs 22 within 16 months of the allotment ~ GEL held 9.51% of GIL’s Equity of 2.1 cr shares of FV Rs 4  at the time and the conversion would take their stake to 47% ~ The Conversion took place on October 29,2008 when GIL issued 1.5 cr shares to GEL

GEL disputed SEBI and appealed to SAT which admitted the Appeal on February 16,2009 and later upheld SEBI Position ~ GEL then took the matter to the Apex Court,Supreme Court in 2009 (Civil Appeal 7666 of 2009)

On hearing Counsel on August 13,2012  the Court ordered to put it up for Final Disposal on October 10,2012 ~ It has been listed but never comes up for Hearing ~ the next listing date is July 9,2013  ~ so hearing is actually overdue after 16 ordered listing till date  in 2009 (1),2010(2),2011(5) and 2012(8)

An Investment Opportunity to consider in such a situation

GIL is available at Rs 10 ,near 52 Week Low of Rs 9 ~ 52 Week High was in October 2012 at Rs 17.60  on BSE ~ It is also listed on NSE

Market Cap is Rs 36 Crs ~The Volumes are not to heavy ~ Two Week average is below 5000 on BSE and yesterday it was under 1000

Current Shareholding of GIL as at March 31,2013 ~ Equity is Rs 14.43 Crs of FV Rs 4 comprising 36080737 shares

Promoters

No of Shares

% Stake

Trinity Infraventures Ltd

17776165

49.27

L P Sashi Kumar

534350

1.48

P S Parthasarthy

37000

0.10

Total Promoters

18347515

50.85

 

 

 

Non Promoters

 

 

LRSD Global Holdings Pvt Ltd

2410208

6.68

Globe Capital Market Ltd

1160795

3.22

Smridhi Farms Pvt Ltd

566862

1.57

Aggarwal Rakesh

436525

1.21

Ashok Kumar Sharma

365527

1.01

Total

4939917

13.69

Other 9988 Shareholders

12793305

35.46

Total Non Promoters

17733222

49.15

Total 9996 Shareholders

36080737

100

The Open Offer will have to be made to Non Promoter Shareholders to pick up 20% of the Equity

Thus 20% of Equity works out to an Open Offer for 7216147 shares => is @ 40.7% of the Non Promoter Shareholding of 17733222 Shares

This would mean that for every 10 shares held ,the Open Offer Success Ratio should be 4 Shares read more