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July 7, 2001
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Money > Business Headlines > Report July 7, 2001 |
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Modi brothers offer to pick entire 44% stake held by FIsBhupesh Bhandari Vinay Kumar Modi and Bhupendra Kumar Modi, the troubled Modi brothers, have offered to pick up the entire 44 per cent stake held by the financial institutions in Modi Rubber Ltd. "We have made a proposal to the FIs to pick up their entire stake within the stipulated guidelines of the Securities & Exchange Board of India," Modi Rubber managing director BK Modi said. BK Modi, on Thursday, met Industrial Development Bank of India chairman SK Chakravarti in Bombay and put forward his proposal. "They want it in writing that the entire 44 per cent stake will be purchased by us. We are working out a procedure to see how it can be done within the limitations of the Sebi guidelines. It is something that our and their lawyers will have to work out," he added. When asked if the brothers had given a guarantee to pick up the remaining shareholding of the institutions after the closure of the open offer, BK Modi said that no such guarantee had been given. He also said that the offer price of Rs 90 per share was acceptable to the FIs and there was no issue left to be resolved there. "It has been indicated to us that they are happy with an average price of Rs 90 per share," he added. Thursday's development gives a glimmer of hope to the Modis who have made an open offer for a 35 per cent stake in Modi Rubber at Rs 90 per share. When the offer opened on June 4, the offer price was Rs 81.50 per share, which the FIs had rejected. Subsequently, the price was revised to Rs 90. However, in their meeting held on July 2, the FIs had decided not to accept the offer as it did not cover their entire shareholding of 44 per cent. According to the sources in HSBC Securities, the manager to the offer, the open offer has managed to get 14-15 per cent shares. As participation in any open offer is accepted on a pro rata basis, the FIs, if they decide to subscribe to the offer, will be able to offload only around 30 per cent. The Modis are now trying to work out modalities to account for the entire 44 per cent. In another development, the Sebi meeting scheduled for Saturday to decide on the 4.53 per cent shares of Modi Rubber held by MK Modi-controlled Modipon Fibres, has been postponed to July 13. Sebi had objected to Modi's offer to sell the shares under the open offer on the grounds that he was a part of the promoter's group. This was challenged in the Bombay High Court by MK Modi, in response to which the court on July 3, had asked Sebi to reconsider its decision. Powered by YOU MAY ALSO WANT TO READ:
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