Sebi asks Fresenius to consider Pre-OFS holding for delisting bid

After the latest Sebi directive promotors will have to increase their holdings to 95% instead of 90% in their delisting bid

The market regulator Securities and Exchange Board of India (Sebi) said the pre-offer for sale (OFS) promoter shareholding would be considered for the delisting offer of Fresenius Kabi Oncology. 

The latest directive by Sebi could make the voluntary delisting of the company more challenging as its promoters will now have to increase their holding to 95%, instead of 90%, in their delisting bid.

The market regulator has also lifted the its restraining order on the company’s promoters to ensure that Fresenius’ voluntary delisting offer is not hindered. 

Sebi had barred the promoters of Fresenius from dealing in the shares of the company for failing to comply with the minimum public shareholding requirement (MPS), which had technically rendered the delisting bid untenable. 

“I am convinced that the company be allowed to proceed with its delisting process, but subject to the condition that its pre-OFS promoter shareholding be considered for computing the percentages under regulations 17 of the delisting regulations,” said Prashant Saran, whole time member, Sebi, in an order today.

As per Sebi regulations, a promoter should increase its shareholding to 90% or buy back at least half of public shareholding, whichever is higher, to delist.
 

The promoter holding in Fresenius earlier stood at 90% before the company sold 9% stake through the OFS route in October 2012. 
 

The pre-OFS shareholding arrangement was advised by Sebi after it received complaints from some investors.

 “Sebi has received complaints from investors alleging, inter alia, that the entities who had purchased shares in the aforesaid OFS might have participated in the OFS with an intent to subsequently tender their shares at an artificial price in the bids for the delisting offer, which will be determined in collusion with the promoters of the company, and thus enable the company to successfully complete the delisting offer,” said the Sebi order.

Sebi has said that the interim order it had passed against the company for failing to meet the MPS requirement would be reimposed immediately in case the delisting process of the company is not successful within a period of three months.