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PUBLIC ANNOUNCEMENT TO THE EQUITY SHAREHOLDERS OF RAJMATA INVESTMENTS AND FINANCE LIMITED [RIFL]

 

This Public Announcement is being issued by Ashika Credit Capital Ltd., the Manager to the Offer, for and on behalf of Sri. K.C.K.A.Gupta, Sri. K. Srinivas Gupta and Sri. M. Venkateswara Rao (hereinafter collectively referred to as "the Acquirers") pursuant to Regulation 10 & 12 in compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 and subsequent amendments thereto (the “Regulations”).

 

The Offer

 

a.      Sri. K.C.K.A.Gupta, Sri. K. Srinivas Gupta and Sri. M. Venkateswara Rao are the Acquirers. There is no Person Acting in Concert (PAC) with the Acquirers for the purpose of the Offer.

 

b.      The Acquirers have entered into a Share Purchase Agreement (“The Agreement”) on February 14, 2002 with Mr.Shyam Sunder Kedia (Promoter/Director) and his relatives (Promoter Group duly represented by constituted attorney holder Mr. Shyam Sunder Kedia) to acquire in aggregate 1,40,650 Fully Paid-up Equity shares of Rs. 10/- each [Mr. Shyam Sunder Kedia HUF (5,200 Equity Shares); Mr.Subhkaran Kedia HUF (26,300 Equity Shares); Mrs. Radhadevi S. Kedia (31,000 Equity Shares); Mrs. Renu Kedia (5,000 Equity Shares); Mr. Anup Kedia (4,800 Equity Shares) Mr. Kailash Chandra Kedia HUF (28,850 Equity Shares) Mrs. Ashadevi K. Kedia (36,950 Equity Shares) and Mr. Laxmikant Kedia HUF (2,550 Equity Shares)] (hereinafter collectively referred to as “Transferors” ) of Rajmata Investments and Finance Limited ("RIFL") representing 58.60% of the Subscribed Equity Share and Voting Capital at a price of Rs.11/- per share ("Negotiated Price") payable in cash ("The Acquisition").

 

c.       The Acquirers are now making this Open Offer (the “Offer”) to the Shareholders of RIFL (other than the parties to the Agreement) to acquire upto 48,000 fully paid-up equity shares of Rs. 10/- each representing 20 % of its paid up equity share and voting capital at a price of Rs.11/- per share (“Offer Price”), payable in cash.

 

d.      The Offer is unconditional and not subject to any minimum level of acceptance.

 

e.      The Acquirers have not acquired any shares of RIFL in the past. The Equity Shares of RIFL are listed at the Stock Exchange, Mumbai (BSE). Based on the information available, the shares of RIFL are infrequently traded within the meaning of Regulation 20 (3) of the Regulations. Therefore, while determining the Offer price, in accordance with the Regulations, the following financial parameters of the RIFL have been considered for the year ended March 31, 2001: Return on Net Worth - Negative; Book Value per share - Rs. 4.50; Earnings per share –Nil; P/E multiples – Infinite [based on the offer price] and Industry P/E Multiple – 9.20 [Source – Dalal Street, Volume XVII No. 2, Dated January 27, 2002, Industry – Finance & Investment]. In view of the aforesaid financial parameters, the offer price is justified in terms of Regulation 20 of the Regulations.

 

f.        The Acquirers does not hold any shares in the RIFL as on the date of Public Announcement.

 

g.      This is not a competitive bid.

 

Information about Acquirers

 

  1. Sri. K.C.K.A.Gupta, S/o. K. Seeta Ramaiah, aged about 73 years, Resident of 3-6-145/9, Himayatnagar, Hyderabad – 500 029, is an industrialist having more than 50 years of experience in Manufacturing, Trading, Exports & Imports and Entertainment/Media. He is the Chairman of Ocean Park Multitech Ltd, Hyderabad. His Net worth as on 23.01.2002 as certified by Mr. G. Shylesh Kumar, (Membership No: 205415) Chartered Accountant, having office at 16-10-27/105/7/D, 1st Floor, Opp. Syndicate Bank, Reddy Complex, Municipal Colony Main Road, Malakpet, Hyderabad -500036 vide certificate dated 08.02.2002 is Rs. 244.55 lacs.

 

  1. Sri. K. Srinivas Gupta, S/o. K.C.K.A.Gupta, aged about 46 years, Resident of 201, Sphinx Apartments, Street No.1, Himayatnagar, Hyderabad – 500 029 is a ME (Civil) having 20 years of experience in Structural Design, Manufacturing, Entertainment/Media. He is Managing Director of Ocean Park Multitech Ltd. His Net worth as on 23.01.2002 as certified by Mr. G. Shylesh Kumar, (Membership No: 205415) Chartered Accountant, having office at 16-10-27/105/7/D, 1st Floor, Opp. Syndicate Bank, Reddy Complex, Municipal Colony Main Road, Malakpet, Hyderabad -500036 vide certificate dated 08.02.2002 is Rs. 98.40 lacs.

 

  1. Sri. M. Venkateswara Rao, S/o. M.Venkat Ratnam, aged about 43 years, Resident of A - 101, Sri Balaji Indraprasath, 1-1-508/1, Gandhinagar, Hyderabad – 500 080 is a Chartered Accountant having 17 years of experience in Financial Management, Construction and Entertainment/Media. He is an Executive Director of Ocean Park Multitech Ltd. His Net worth as on 23.01.2002 as certified by Mr. G. Shylesh Kumar, (Membership No: 205415) Chartered Accountant, having office at 16-10-27/105/7/D, 1st Floor, Opp. Syndicate Bank, Reddy Complex, Municipal Colony Main Road, Malakpet, Hyderabad -500036 vide certificate dated 08.02.2002 is Rs. 76.90 lacs.

 

  1. Sri. K.C.K.A.Gupta is father of Sri. K. Srinivas Gupta and Sri. M. Venkateswara Rao is a Business partner.

 

  1. The Acquirers have promoted unlisted companies in the related activities, the particulars of which are given as under: -

 

a.      Kwality Electricals Pvt. Ltd., incorporated on 13.03.1980 Under the Companies Act 1956, is engaged in manufacturing of miniature lamps, Railway Signal lamps etc. The Manufacturing site is Located at Himayatnagar, Hyderabad. As per the Audited Accounts for the year-ended 31.03.2001, the Total Income and Net Profit of the company was Rs.48.06 lacs and Rs. 0.05 lacs respectively.

 

    1. Ocean Park Multitech Ltd. [formerly Aashraya Resorts Private Limited], incorporated on 21.12.1995, Under the Companies Act 1956, is engaged in Entertainment sector offering water rides and amusement rides for people of all ages and Animation. The amusement park is located at Gandipet, Near Hyderabad and well known as “OCEAN PARK”. As per the Audited Accounts for the year ended 31.03.2001, the Total Income and Net Profit of the company was Rs.461.78 lacs and Rs.101.47 lacs respectively.

 

    1. Aashraya Housing Pvt. Ltd., incorporated on 28.07.1995, Under the Companies Act 1956 is engaged in construction activities. Presently, it is constructing a commercial complex at Begumpet, Hyderabad. As per the Audited Accounts for the year-ended 31.03.2001, the Total Income and Net Profit of the company was Rs.38.90 lacs and Rs.3.52 lacs respectively.

 

    1. Kwality Photonics Private Ltd., incorporated on 15.01.1993, is engaged in manufacturing of Light Emitting Diodes, LED Displays and Opto Electronic Products. As per the Audited Accounts for the year-ended 31.03.2001, the Total Income and Net Profit of the company was Rs.161.42 lacs and Rs.17.53 lacs respectively.

 

    1. Aashraya Amusements Pvt. Ltd., incorporated on 18.03.1996 is not engaged in any kind of business activity. And hence, the Profit & Loss Account of the company is not drawn.

 

    1. B.D.A.Ocean Park Limited, incorporated on 14.01.2000 is not engaged in any kind of business activity. And hence, the Profit & Loss Account of the company is not drawn.

 

    1. Aashraya Housing Corporation is a partnership firm, registered in the year 1992. It was engaged in the business of construction until 1998. Presently, the firm is not carrying on any business. Hence, no profit & loss account drawn up.

 

 

 

 

 

Information about the Target Company

 

  1. RIFL was incorporated on 3.12.1981 and certificate for Commencement of Business was obtained on 21.12.1981, under the Companies Act, 1956. The Registered Office of the Company is situated at 337, Badamwadi, 1st Floor, Kalbadevi Road, MUMBAI – 400002.

 

  1. The Authorized Share Capital of RIFL is Rs 25.00 Lacs divided into 2,50,000 Equity Shares of Rs 10/- each and Issued, Subscribed and Paid-up Share Capital is Rs. 24.00 lacs comprising of 2,40,000 Equity Shares of Rs.10/- each. There are no partly paid-up shares.

 

  1. RIFL is engaged in the business of Investment and Finance.

 

  1. The Shares of RIFL are listed at the Stock Exchange, Mumbai (BSE).  

 

  1. As per Audited Accounts for the year-ended 31.03.2001, RIFL earned Gross Revenue of Rs. 3.69 Lacs thereby incurring Net Loss of Rs. 0.42 lac.

 

Reasons For The Acquisition And Offer

 

  1. The Acquirers have entered into the Share Purchase Agreement with the objective of Substantial acquisition of shares and voting rights accompanied with change in control/ management and is making the Open Offer pursuant to the Regulation 10 & 12 of the Regulations.

 

  1. The Acquirers proposes to expand the finance and investment activities of RIFL as well as to diversify into the construction and entertainment sector including Development of Amusement Park, Theme Park, Family Entertainment Centers etc. The Acquirers does not propose to dispose off or otherwise encumber any of the assets of RIFL in the next 2 years, except in the ordinary course of business.

 

  1. The Acquirers by virtue of their technical expertise and experiences in the related activities are better placed to turn the company profitable.

 

Statutory Approvals/ Other Approvals Required For The Offer

 

               a.             The Acquirers will make the requisite application to the Reserve Bank of India ("RBI") to obtain permission under the Foreign Exchange Management Act, 1999 ("FEMA") and subsequent amendments there to for acquiring shares from the Non Resident/NRI/FII/OCB shareholders of RIFL.

 

               b.             The Acquirers do not require any other statutory approvals for the purpose of the Offer.

 

                c.             In case of non-receipt of statutory approvals within time, SEBI has a power to grant extension of time for payment of consideration to the shareholders, who have accepted the Offer, subject to Acquirers agreeing to pay interest as directed by SEBI under Regulation 22(12) of the Regulations.

 

De-listing option to the Acquirers

 

Pursuant to this offer, the public shareholding will not be reduced to 10% or less of the voting capital of RIFL, and therefore the provisions of Regulation 21(3) of the Regulations do not apply.

 

Financial Arrangements 

 

a.      The Acquirers have made firm arrangements for the implementation of the offer in full from their own internal/domestic sources. G. Shylesh Kumar, (Membership No: 205415) Chartered Accountant, having office at 16-10-27/105/7/D, 1st Floor, Opp. Syndicate Bank, Reddy Complex, Municipal Colony Main Road, Malakpet, Hyderabad -500036 has certified that sufficient resources are available with the acquirers for fulfilling the obligations under this "Offer" in full.

 

b.      The Acquirers have opened an Escrow Account in the Global Trust Bank Ltd., Himayatnagar Branch, Hyderabad-500029 and made a deposit in the account an amount of Rs.1,35,000 /- (Rupees One Lac Thirty Five Thousand Only) being more than 25% of the total consideration payable of Rs.5,28,000/-.

 

c.      The Manager to the Offer has been solely authorised by the Acquirers to realise the value of Escrow Account in terms of the Regulations.

 

d.      The Manager to the Offer, Ashika Credit Capital Limited confirms that the firm arrangement for the funds and money for payment through verifiable means are in place to fulfill the offer obligations.

 

Other terms of the Offer 

 

a.      The Letter of Offer together with the Form of Acceptance cum Acknowledgement will be mailed to all those shareholders of RIFL (other than the parties to the agreement) whose names appear on the Register of Members of RIFL at the close of business hours on 20.02.2002 (the "Specified Date").

 

b.      Persons who are shareholders of RIFL but are not registered or who have sent their shares for transfer or shareholders who have not received the Letter of Offer and who wish to accept the offer should send their application in writing on plain paper with the following information:                                              Name & Address of the first holder, Name(s) & address(s) of joint holders(s) if any, Regd. Folio No., Share Certificate No., Distinctive Nos., No of Shares offered. The said application should be sent to the Manager to the Offer. Alternatively, shareholders who have not received the Letter of Offer & Form of Acceptance may obtain a copy of the same (on providing suitable documentary evidence like folio number, share certificate number, distinctive numbers etc.) from Manager to the Offer.

 

c.       All owners of shares, registered or unregistered, are eligible to participate in the offer. Unregistered shareholders / owners of shares who have sent shares for transfer should send to the Manager to the Offer the following documents as applicable to them along with the acceptance cum Acknowledgement:                                                                                                                              (a) Original share certificate(s), (b) Original broker contract note, (c) Valid share transfer form(s) as received from the market.                                                                                                                           No indemnity is required from unregistered shareholders.

 

d.      Shareholders who wish to accept the offer and tender their Equity Shares, will be required to send their (i) duly signed Form of Acceptance, (ii) original share certificate(s), (iii) duly signed and executed transfer deed(s) and other documents to the Manager to the Offer, in accordance with the instructions specified in the Letter of Offer and on the Form of Acceptance.

 

e.      In case the number of shares validly tendered in the Offer by the shareholders of RIFL are more than the shares to be acquired in this Offer, then the Acquirers will accept shares on a proportionate basis subject to a minimum of 50 Equity Shares, or the entire holding if less than the minimum marketable lot of 50, from each shareholder accepting this Offer as per the provisions of the Regulations. The rejected applications/documents will be sent by Regd. Post.

 

f.        The Payment for the acquisition of the shares will be made by the Acquirers in cash through a crossed Demand Draft/Pay order, to the equity shareholders of RIFL whose equity share certificates and other documents are found in order and accepted, within 15 days from the date of closure of the Offer.

 

g.      The Acquirers undertake to pay interest Pursuant to Regulation 22 (12) to the shareholders for the delay, if any, in payment of consideration.

 

h.      Attention of the shareholders is invited to the fact that the Letter of Offer along with the form of Acceptance would also be available on the SEBI web site at www.sebi.gov.in and eligible persons may download the Form of Acceptance cum Acknowledgement from the website for applying in the offer.

 

 

 

 

 

 

i.         The schedule of the activities pertaining to the Offer are given below:-

Activities

Date (Day)

Specified date

20.02.2002 (Wednesday)

Letter Of Offer to be posted to shareholders

27.03.2002 (Wednesday)

Date of Opening of the Offer

03.04.2002 (Wednesday)

Date of Closing of the Offer

02.05.2002 (Thursday)

Last date for revising the Offer price/ number of shares 

25.04.2002 (Thursday)

Date of communicating rejection/ acceptance and payment of consideration for applications accepted

17.05.2002 (Friday)

 

General

    1. Shareholders who have accepted the Offer by tendering the requisite documents, in terms of the Public announcement / Letter of Offer, cannot withdraw the same.

 

    1. The Acquirers can revise the Price upwards up to 7 working days prior to closure of the Offer and revision, if any, in the Offer price would appear in the same newspapers where this Public Announcement appeared and the same price would be paid to all shareholders who tender their shares in the Offer.

 

    1. Neither the Acquirers nor Transferors and/or RIFL has been prohibited by SEBI from dealing in securities, in terms of direction issued u/s 11B of SEBI Act.

 

    1. Attention of the shareholders is invited to the fact that this Public Announcement will also be available on the SEBI website at www.sebi.gov.in

 

    1. Pursuant to Regulation 13 of the Takeover Regulations, the Acquirers has appointed Ashika Credit Capital Limited, Hyderabad, a Category 1 Merchant Banker, as Manager to the Offer.

 

    1. Sri. K.C.K.A.Gupta, Resident of 3-6-145/9, Himayatnagar, Hyderabad – 500 029; Sri. K. Srinivas Gupta, Resident of 201, Sphinx Apartments, Road No.1, Himayatnagar, Hyderabad – 500 029 and Sri. M. Venkateswara Rao, Resident of A - 101, Sri Balaji Indraprasath, 1-1-508/1, Gandhinagar, Hyderabad – 500 080 individually and collectively accept full responsibility for the information contained in this Public Announcement and also for the obligations of Acquirers laid down in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997 and subsequent amendments thereof.

 

Issued by Manager to the Offer on behalf of the Acquirers

 

Ashika Credit Capital Ltd.

[Contact Person: Mr.Rajendra Kanoongo]

408, Taramandal Complex

Near Secretariat, Saifabad

Hyderabad-500 004.

Tel: 040- 6617802 / 03

Fax: 040-6617801

E-Mail: ashika_hyderabad@rediffmail.com

 

Place: Hyderabad

Date: 18.02.2002