TaxTMI 
TaxTMI 
2025 (6) TMI 1887
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....ic Asset Management ("DIPAM"), Ministry of Finance, Government of India ("GOI") (hereinafter referred to as "Acquirer / Applicant"). 3. The submissions made by the Applicant in the Application are as under: (a) The issued, subscribed and paid up Equity Share Capital of the Target Company is Rs. 7,13,93,03,50,010/- divided into 71,39,30,35,001 equity shares of Rs. 10/- each. The Target Company has a public shareholding of 61.20% and the remaining non-public shareholding of 38.80% is held by promoters and the promoter group. (b) Telecom sector in India is facing several challenges and accordingly, the Government of India, announced the ''Reforms and Support Package for Telecom Sector-Reg", dated September 15, 2021, providing certain relaxations in relation to payment of spectrum auction dues and Adjusted Gross Revenue ("AGR") dues ("Telecom Relief Package, 2021"), which was communicated to the telecom service providers ("TSPs") companies by the Department of Telecommunication, Ministry of Communications, Government of India ("DoT") vide letter dated October 14, 2021. The Telecom Relief Package, 2021 was announced to protect employment, promote healthy com....
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....equent to this acquisition of shares, the total number of shares held by the GOI (including the shares already held prior to this conversion) shall be 53,08,31,84,899 equity shares (amounting to approximately 48.99% shareholding in the Target Company, on a post-acquisition basis). (h) The proposed transaction involves issue of 36,95,00,00,000 equity shares of the Target Company to the GOI / Acquirer by way of order under Section 62(4) of the Companies Act, 2013. (i) The acquisition of the aforesaid shares of the Target Company by GOI would result in the cumulative shareholding of GOI in the Target Company exceeding twenty-five percent (25%) and consequently, in accordance with the provisions of the Takeover Regulations, 2011, shall require an open offer to be made to the public to acquire shares in the Target Company, in terms of the provisions of Regulation 3(1) of the Takeover Regulations, 2011. Grounds for Seeking Exemption 4. The Applicant has sought exemption vide the Application on the following grounds: (a) An open offer shall require additional investment for the acquisition of further equity shares by the GOI. Such a requirement renders the....
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....ted an exemption from the open offer stipulations in terms of Regulation 3(1) of the Takeover Regulations, 2011 in the matter of direct acquisition of 33.44% shareholding and voting rights by the GOI in the Target Company pursuant to the Telecom Relief Package, 2021 offered to telecom service providers. Consideration 5. I have considered the Application submitted by the Applicant and other material available on record. Before I proceed further, I deem fit to draw reference to the provisions of Regulation 3(1) of Takeover Regulations, 2011, which state as under - "Substantial acquisition of shares or voting rights. 3. (1) No acquirer shall acquire shares or voting rights in a target company which taken together with shares or voting rights, if any, held by him and by persons acting in concert with him in such target company, entitle them to exercise twenty-five per cent or more of the voting rights in such target company unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations." 6. Without reiterating the facts as stated above, I note the following: (a) The pr....
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.... Further, such holding of GOI shall be classified as Public Shareholding. (e) In terms of Regulation 10(1)(i) of the Takeover Regulations, 2011, acquisition of shares by lenders pursuant to conversion of their debt as part of a debt restructuring scheme implemented in accordance with the guidelines of Reserve Bank of India is exempt from the obligation to make an open offer. In my view, it shall be appropriate to treat the conversion of VIL's Outstanding Spectrum Auction Dues (including deferred dues) repayable after the expiry of the moratorium period, into equity shares to be issued to GOI, at par with a debt restructuring scheme as envisaged under Regulation 10(1)(i) of Takeover Regulations, 2011. (f) In view of the special circumstances of this matter, public policy and public interest involved in the entire transaction and taking into cognizance various steps taken by GOI to ease liquidity and cash flow to the TSPs as well as to help various banks having substantial exposure to the Telecom sector, I note that the proposed acquisition of shares by GOI merits consideration. Considering the fact that a substantial sum of money is due to be paid to the GOI by VIL....