Sebi exempts Diamond Power Infra promoters from open offer

Sebi today exempted the promoters of Diamond Power Infrastructure from obligation of making an open offer pursuant to increase in promoters' stake due to proposed conversion of financial assistance into warrants and later into equity shares.
As per the proposed transaction, promoters of the company, Diamond Projects and Diamond Power Transmission will infuse unsecured loan amounting to Rs 33.07 crore each, aggregating to Rs 66.14 crore in line with the restructuring scheme approved by Joint Lenders Forum.
The promoters will acquire the shares on conversion of the unsecured loan into warrants and later on the same will be converted into equity shares ranking pari passu with existing equity shares of the company as per the terms of 'restructuring scheme' and not by way of acquisition from the existing shareholders.

The proposed conversion will increase the shareholding of the promoter group of Diamond Power Infra from 34.71 per cent to 46.60 per cent.
After looking into the plea for an exemption from open offer, Sebi said that "the proposed acquisition of shares by conversion of warrants is in line with the circular of Reserve Bank of India".
The regulator further noted the proposed acquisition at Rs 55 per share is reasonably higher than the present market price of Rs 25.10 as on March 22, 2016, and does not give any unfair advantage to the promoters.
Sebi also said the proposed acquisition would not result in any change of control of the management of the company. Also, pursuant to the proposed acquisition of shares, the company will continue to be in compliance with the Minimum Public Shareholding requirements.

The Securities and Exchange Board of India (Sebi) rules require a mandatory open offer for minority shareholders in the event of any major change in the promoter holding of a listed company, including if the change is more than 5 per cent.