The BOC Group Ltd, promoter of Linde India Ltd, has offered to take full ownership of the company and delist the firm from the country's bourses. This follows as a result of the global merger between Linde AG and Praxair Inc, whereby Linde Plc has acquired control and voting rights of Linde AG.
In a notice to the BSE, Linde India said that the primary objective of making the delisting offer is to obtain full ownership of equity shares of this company by the promoters. This will provide the promoter group with operational flexibility to support the business and future financing needs.
Moreover, ongoing expenses with the maintenance of listing on BSE and NSE will be reduced, including investor relations expenses, and the management can dedicate its full time and energy to focus solely on the business. Moreover, for a non-listed entity, time dedicated to compliance with listing requirements gets reduced.
About delisting from the bourses, a letter written by Andrew Brackfield, director at The BOC Group, reasoned that according to Securities and Exchange Board of India (Sebi) regulations, 25 per cent of the equity share capital of a company is required to be held by public shareholders. "In the event any public shareholder subscribes to the open offer, the promoter group's direct and indirect (as applicable) shareholding in the company post the completion of the aforementioned open offer will exceed 75 per cent of the equity share capital of the company and could be as much as 100 per cent in case the open offer is fully subscribed," the letter read.
According to this letter, the promoter group, thus, will have to consider divesting the excess shareholding in the secondary market in a time-bound manner within 12 months of the completion of the open offer.
"Therefore, the promoter group believes that a delisting proposal is a quicker and more cost-effective way for the promoter group to comply with SCRR, Sebi LODR," Brackfield said.
Linde India's board has already appointed ICICI Securities as the merchant banker for carrying out the due diligence process.
According to The BOC Group, the delisting price will be determined in accordance with the reverse book building process in the manner specified in the delisting regulations after the fixing of the floor price.
"The floor price is not a ceiling for the purpose of the reverse book building process and the public shareholders may offer their respective shares at any price higher than floor price," the letter added.
Linde India shares closed at Rs 582.65 apiece, surging by 20 per cent, on the BSE.