Sebi Clears Hitachi Issue, Needs Undertaking From Promoters

Mumbai, September 23: | Updated: Sep 24 2003, 05:30am hrs
Keeping in mind the interests of minority shareholders, the capital market regulator Securities and Exchange Board of India (Sebi) has given conditional clearance for the rights issue of Hitachi Home and Life Solution (India) Ltd (HHLSIL) (formerly known as Amtrex Hitachi Appliances Ltd, AHAL), which was stopped by the regulator in March this year. Sebi has also asked both the existing promoter Hitachi Inc, Japan and Aasman Holding, former promoter company from the Lalbhai Group, to give a separate undertaking to honour the interest of the minority shareholders of HHLSIL, pending the outcome of its investigation.

Sebi has asked Hitachi Inc, Japan, the present promoter group of HHLSIL, to give an undertaking, under which the promoter is expected to comply with Clause 17 of Sebi, delisting guidelines in the event of public-holding in the company falls below minimum listing requirement (25 per cent in the instant case). The promoter group have been asked either to make an open offer to buyout the balance public share-holding, if following the rights issue, the promoters stake rises beyond 75 per cent or to make offer for sale and divest such a number of shares so as to bring back public-holding to the minimum listing requirement.

Promoters have been allowed by Sebi to subscribe to the unsubscribed portion of the issue to reach the level of 90 per cent of issue size. Sebi has also asked Aasman Holding to give an undertaking that in the event of them (Aasman) being required to make an open offer, they would not be interested in subscribing to rights issue on the shares they would acquire as a result of the open offer.

Aasman Holdings does not hold any shares of HHLSIL as they have sold their entire holding of AHAL to Hitachi of Japan and the name of the company was subsequently changed to HHLSIL. However, Sebi has not mentioned at what price the acquirer should acquire the balance shareholding or make the open offer, as that decision will be based on the outcome of investigation which is still on, explained sources familiar with the development.

Sebi in its observation made on September 12, while clearing the offer document said, rights issue of 88 lakh shares of HHLSIL at a face value of Rs 10 with a premium of Rs 21 per share to raise Rs 27.28 crore is cleared. The observation for the rights issue by Sebi was made on Sept 12 and as per the recent amendments to DIP norms on August 14, this observation is valid for a period of only three months where as earlier the validity period of Sebis observation was 365 days. This also means that the rights issue and/or the open offer will be over by Dec 03.