DEPUTY GENERAL MANAGER
DIVISION OF CORPORATE RESTRUCTURING
Ph.: 022-26449380
CFD/DCR/AG/TO/ /07
July 26, 2007
Edelweiss Capital Ltd
Express Tower
14th Floor,
Nariman Point
Mumbai – 400 021
Sub.: Public offer for acquisition of 20% of the equity share capital of Deccan Aviation Ltd. by Kingfisher Radio Ltd. (acquirer) and United Breweries (Holdings) Ltd., UB Overseas Ltd.(PACs) -SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 {Regulations}
1. This has reference to the news item titled “UB Holding’ open offer for Air Deccan yet to get nod” published in Business Line dated 26.07.07 in respect of the captioned open offer.
2. The news item, carrying the information received from the acquirer and you, inter alia, mentions that though SEBI has not raised any queries about the open offer, it was yet to clear the offer document and therefore, as per notice sent to BSE, the schedule of activities shall be required to be revised.
3. Your attention is drawn to regulation 16(xiv) of the captioned Regulations in terms of which the Public Announcement (PA) for the open offer should contain the disclosure to the effect that firm arrangement for financial resources required to implement the offer is already in place, including details regarding the sources of the funds whether domestic i.e from banks, financial institutions, or otherwise or foreign i.e., from Non-Resident Indians or otherwise.
4. In the PA dated 05.06.07 in respect of the captioned offer, it was, inter alia, stated that “Acquirers have confirmed adequate financial resources will be made available to fulfill the financial obligations arising out of the open offer. Acquirers have agreed to make available the requisite funds to meet the obligation”. This shows that firm arrangements for adequate financial resources were not in
place at the time of the public announcement. Similar disclosures were also made in the draft letter of offer submitted to SEBI vide your letter dated 19.06.07. However, till date, details of firm financial arrangements made by the acquirer to fulfill their obligations arising out of the open offer have not been furnished by you despite repeated reminders by SEBI in this regard.
5. Under the circumstances, your sending notice to the BSE with the claim that the offer document is pending with SEBI and therefore the schedule of activities needs to be revised is not justified on your part, considering the fact that you have not complied with the above mentioned provisions of the Regulations.
6. Regarding the statement that SEBI has not raised any queries about the open offer, we would like to point out that we had been constantly following up with your office vide email and telephone calls on various occasions for clarification on the details of the financial arrangements made for the open offer. Therefore, the aforesaid statement appearing in the news item implying that SEBI has not raised any queries is factually incorrect.
7. It is expected that you and/or your clients refrain from making such incorrect and misleading statements which shows the regulators in poor light.
8. In view of the above, you are advised to offer your explanation on the above and issue a clarification in the press to state the correct position.
(SOMA MAJUMDER)