TIDMDHIR
RNS Number : 3019U
Dhir India Investments plc
20 December 2011
20 December 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, IN, OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
Cash Offer by Cairn Financial Advisers
on behalf of
Acorn Global Investments Limited
for
Dhir India Investments plc
Introduction
Cairn Financial Advisers, on behalf of the boards of Acorn
Global Investments Limited ("Acorn") and Dhir India Investments plc
("DII"), announces the terms of a cash offer to be made by Cairn
Financial Advisers on behalf of Acorn to acquire the entire issued
and to be issued share capital of DII (the "Offer").
The Offer
The Offer, which is made by Cairn Financial Advisers on behalf
of Acorn, will be subject to the terms and conditions which are set
out below and in Appendix I to this announcement and to the full
terms and conditions to be set out in the Offer Document and, in
respect of DII Shares in certificated form, in the Form of
Acceptance, and will be made on the following basis:
42 pence in cash for each DII Share
The Offer will value DII's entire issued share capital at
approximately GBP7 million. The Offer Price of 42 pence per DII
Share represents a premium of approximately 175 per cent. to the
Closing Price of 15.25 pence per DII Share on 19 December 2011,
being the last business day prior to the commencement of the Offer
Period.
The Offer will extend to any DII Shares unconditionally allotted
or issued after 20 December 2011 and before the time at which the
Offer ceases to be open for acceptance (or before such earlier time
as Acorn may, in accordance with the terms and conditions of the
Offer, and subject to the rules of the Code, decide).
The DII Shares that are subject to the Offer will be acquired by
Acorn, fully paid with full title guarantee and free from all
liens, charges, equitable interests, encumbrances, rights of
pre-emption and any other third party rights or interests of any
nature whatsoever and together with all rights now or hereafter
attaching thereto, including the right to dividends declared on DII
Shares.
Full details of the conditions to which the Offer is subject are
set out in Appendix I to this announcement. The full terms of the
Offer will be set out in the Offer Document and, in respect of DII
Shares in certificated form, in the Form of Acceptance which are
expected to be sent to DII Shareholders later today.
Background
DII was formed, raised money and its shares were admitted to
trading on AIM in July 2007 for the purpose of investing in
distressed assets in the then burgeoning non-performing assets
("NPAs") market in India. The introduction of the SARFAESI Act in
India in 2002 had raised expectations of speedy resolution and
recovery from Indian NPAs by providing lenders with a mechanism for
restructuring distressed companies without court intervention.
However, the benefits expected to have emerged from the SARFAESI
Act have not materialised and recoveries from NPAs have generally
remained enmeshed in court processes, resulting in significant
delays in the resolution and recovery process.
In addition to the disappointing impact of the SARFAESI Act,
when the funds were raised by DII in 2007 and subsequently deployed
by DII in 2008, with the benefit of hindsight, markets were very
buoyant and the prices of assets were peaking. Shortly thereafter,
there was a worldwide financial crisis and asset values fell
sharply. These factors have combined to frustrate the DII board's
strategy of realising DII's investments at acceptable prices within
the timeframe envisaged in DII's Admission Document.
DII's unaudited interim results for the six months ended 30
September 2011 were released earlier today. DII reported a net
asset value per share of 74 pence and an adjusted net asset value
per share (excluding the deferred tax provision which the
Independent Directors of DII anticipate should not be payable) of
77 pence as at 30 September 2011.
The full text of the announcement containing the unaudited
interim results for the six months ended 30 September 2011 is
available on DII's website www.dhirindia.com.
The chairman's statement in the half-yearly results states that
the DII board is considering a number of options to accelerate the
process of realising DII's investments whilst maximising returns to
DII Shareholders. These options include, but are not limited to,
appointing a new investment manager (with performance-based rather
than fixed management fees) or seeking to amend the structure and
governance of DII. In particular, the Independent Directors of DII
have recently been consulting with PricewaterhouseCoopers in India
regarding alternative investment management and realisation
options. The Independent Directors of DII are aware that
accelerating the process of realisation may result in somewhat
lower values to DII Shareholders and future balance sheet
valuations are likely to continue to reflect this. In addition, one
of the options being considered by the Independent Directors of DII
is to seek cancellation of admission to trading of the DII Shares
on AIM, to minimise ongoing costs and preserve so far as possible
DII's cash resources.
Acorn's views on the DII board's strategy are:
1. there are likely to be very few opportunities to dispose of
assets over a 3 to 6 month period. In any event, such sales would,
in all likelihood, be at distressed prices and are likely to fall
far short of the values attributed to them in the half year results
to 30 September 2011. Also, prime assets would, in all likelihood
be sold first, which would mean that the remaining portfolio would
be unlikely to attract any meaningful values but nonetheless would
continue to utilise the time and resources of DII;
2. the legal process of repatriation of unutilised cash in DII's
special purpose vehicles to DII, is and will continue to be,
influenced by a number of factors outside the control of DII
(including legal and regulatory complications) and such
repatriations are unlikely to be completed in the timeframe being
contemplated;
3. reorganisation and/or restructuring of the DII Group is
likely to be expensive and time consuming and is unlikely to yield
any tangible benefit to DII Shareholders; and
4. although delisting will save some costs, it will undoubtedly
have a significant adverse impact on the liquidity of DII
Shares.
Options for Shareholders
As it stands and in light of these unexpected difficulties, the
Acorn board believes there are three main options for the return of
funds to Shareholders. These comprise:
1. accepting the DII board's strategy of speeding up sales as
outlined in the chairman's statement accompanying the half-yearly
results to 30 September 2011, commented under 1 above.
2. reverting to the DII board's original investing strategy of
realising the investments over time and repatriating funds to
Shareholders.
This, in Acorn's view, is likely to take considerable time and
skill as well as knowledge of the assets and it is difficult to
estimate accurately the ultimate returns to Shareholders and their
timing. The Acorn board continues to believe that this is the
optimum strategy for maximising Shareholder returns, but it will
take time for this strategy to be implemented in full and involves
some risk. This may suit some, but not necessarily all,
Shareholders.
3. accepting Acorn's Offer for some or all of your DII Shares.
In Acorn's view, the Offer provides DII Shareholders with an
immediate opportunity to realise their investment in cash at a
significant premium to the current market price of DII Shares
against a background of a sharply declining share price (down 66
per cent. since 1 July 2011) and fundamental uncertainty as to the
NAV per DII Share. For those Shareholders with a longer term
timeframe for realising their investment, if the Offer becomes
unconditional, Acorn's strategy for DII will allow for the
necessary time to carry on the resolution and recovery process in
the optimum manner for maximising Shareholder returns.
Information on Acorn
Acorn was incorporated on 7 October 2011, under the BVI Business
Companies Act 2004, for the purpose of making the Offer. As Acorn
has only been recently incorporated, it has not yet published any
accounts and accordingly, no financial information is available for
inclusion in this announcement.
Acorn is funded with a mix of GBP785,795 of equity and GBP6.65
million of debt. Of this, GBP7 million is set aside to finance the
Offer. DII's condensed consolidated statement of financial position
at 30 September 2011 showed that it had total equity attributable
to equity holders of GBP12.3 million. Other than trade creditors
and other liabilities of GBP675,000 and deferred tax liabilities of
GBP485,000 there were no other liabilities or debt.
As a newly incorporated company, Acorn has no historical
earnings and, therefore, the earnings of DII will be wholly
incremental to it.
Acorn has been set up and is owned by certain members of the
family and other business associates of Mr Alok Dhir, a director of
DII and a director and major shareholder of Shiva, DII's investment
manager.
Information on DII
DII is an AIM quoted Isle of Man company which invests in Indian
non-performing assets with the objective of providing Shareholders
with both income and capital growth. DII was incorporated on 20
June 2007 and its shares were admitted to trading on AIM on 12 July
2007, at which time, DII raised GBP25 million to pursue its
investment strategy.
At the time of its flotation on AIM in 2007, the directors of
DII believed DII was the first UK-quoted vehicle to provide western
fund managers with an opportunity to invest in Indian NPAs.
As reported in DII's interim results for the 6 months ended 30
September 2011, DII currently has interests in five projects and
one quoted business on the Bombay Stock Exchange. The total cost of
these investments is GBP17.99 million.
Financing of the Offer
The Offer is being financed by Acorn through a combination of
shareholder funds and a GBP6.65 million loan facility provided to
Acorn by one of its shareholders, F1 Global.
Cairn Financial Advisers, as financial adviser to Acorn, is
satisfied that sufficient resources are available to Acorn to
satisfy in full the cash consideration payable to Shareholders
pursuant to the
Offer.
Acorn's intentions relating to the DII Group
If the Offer becomes unconditional, and subject to DII retaining
its admission to AIM, it is Acorn's intention that, while the
composition of the DII board should continue to comply with the AIM
Rules with regard to efficacy and independence, two or more
representatives of Acorn will be appointed to the DII board.
Save as referred to above, Acorn does not currently contemplate
that any changes will be made to the strategic direction of DII as
a result of the Offer, save for the withdrawal of the notice of
termination for Shiva as investment manager.
As neither DII nor Acorn have any employees and there are no
significant strategic changes envisioned for DII, should the Offer
be successful, there will be no repercussions as a result of the
Offer on employment or the location of the DII's places of
business.
Advice to DII Shareholders
Under the rules of the City Code, the Independent Directors are
required to obtain independent advice on the Offer and to make the
substance of such advice and their own views known to DII
Shareholders. The Independent Directors are being advised by
Evolution Securities.
The Independent Directors do not believe it is appropriate to
provide DII Shareholders with a definitive recommendation at this
time. In evaluating what action to take, you should carefully
review the considerations for acceptance or rejection of the Offer
in whole or in part summarised below.
Considerations for accepting the Offer
The Offer Price of 42 pence per DII Share represents a
significant premium of 175 per cent. to the Closing Price for DII
Shares of 15.25 pence per DII Share as at 19 December 2011, the
business day
prior to the commencement of the Offer Period.
-- The Offer represents an immediate cash exit for DII
Shareholders providing a tangible value for DII Shareholders'
holdings in DII and eliminating the risks and uncertainties to DII
Shareholders that arise as a result of the continued delays in
achieving realisations from the investment portfolio, DII's
steadily reducing cash resources and the complications in
repatriating funds to DII Shareholders, and the lack of liquidity
and poor performance of DII Shares on AIM.
-- The ability to realise DII's assets and the value at which
they could be realised is uncertain and dependent upon, inter alia,
the ability of DII to achieve the realisation process in respect of
which there are significant execution risks. Although the
Independent Directors believe that there is the possibility of
significant upside to the DII Share price should the Company be
able successfully to execute its realisation plans, this is
dependent on numerous factors, a number of which are outside the
control of the Company (for example, the complicated and difficult
court realisation processes in India).
-- DII Shareholders retaining their stake will find themselves
to be shareholders in a controlled company, in which trading
liquidity may be restricted by the presence of a majority
shareholder and where operational decisions are capable of being
controlled by such shareholder. Acorn will be in a position to
exert significant influence over DII and if circumstances change,
Acorn's future plans for DII cannot be certain. Should Acorn decide
to finance DII's future business by means of equity finance, this
may result in significant dilution of minority DII Shareholders,
save to the extent that they are able to take up any DII Shares
offered on a pre-emptive basis (which would, of course, involve DII
Shareholders making an additional financial commitment to DII).
-- The DII Shares have been largely illiquid and if DII
Shareholders do not accept the Offer it is possible that they might
be unable to sell their DII Shares at a price equivalent to that
available under the Offer for some time, if at all.
-- If the Offer becomes unconditional, Acorn will be free to
increase its shareholding in DII without making a further offer.
This will give Acorn significant influence over the future
strategic direction of DII. This may also further worsen the
liquidity of DII Shares admitted to AIM.
-- If the Offer is not successful, the future investment
management arrangements of DII are uncertain:
-- Shiva is currently under 12 months' notice of termination
until May 2012 and there is as yet no certainty as to what the
investment management arrangements would be thereafter
(notwithstanding the recent discussions with PricewaterhouseCoopers
in India referred to above). It may also be considered appropriate
to seek cancellation of admission to trading of the DII Shares on
AIM, to minimise ongoing costs and preserve so far as possible
DII's cash resources.
Considerations for not accepting the Offer
-- The Offer Price of 42 pence per DII Share represents a
significant discount to DII's net asset value per share of 74 pence
and adjusted net asset value per share (excluding the deferred tax
provision, which the Independent Directors anticipate should not be
payable) of 77 pence as at 30 September 2011. As noted above, the
Independent Directors are aware that accelerating the process of
realisation may result in somewhat lower values to DII
Shareholders. Notwithstanding this, the Independent Directors still
believe that the Offer Price neither fully reflects the fundamental
longterm value of DII's investment portfolio nor includes
sufficient premium for control of DII.
-- Acceptance of the Offer would not allow DII Shareholders to
participate in any potential future rise in the share price. DII
Shareholders should note that share prices can go down as well as
up.
Opinion of the Independent Directors of Dhir India Investments
plc
In deciding whether or not to accept the Offer, the Independent
Directors of DII, who have been so advised by Evolution Securities,
believe that DII Shareholders should bear in mind that, whilst the
Offer may not fully reflect the fundamental long-term value of
DII's investment portfolio, there may be adverse consequences of
not accepting the Offer as set out above. Consequently, DII
Shareholders should carefully consider their own individual
investment requirements and personal circumstances, as well as
considerations set out by the Independent Directors of DII in this
announcement, when deciding whether or not the Offer merits
acceptance in whole or in part. In providing its advice, Evolution
Securities has taken account of the commercial assessment of the
Independent Directors.
Further information
Acorn confirms that it is today making an Opening Position
Disclosure, setting out the details required to be disclosed by it
under Rule 8.1(a) of the Code.
The availability of the Offer to persons not resident in the
United Kingdom may be prohibited or affected by the laws of the
relevant jurisdictions. Such persons should inform themselves
about, and observe any applicable requirements. Further details in
relation to overseas shareholders will be contained in the Offer
Document.
This announcement is for information purposes only and does not
constitute an offer to sell or an invitation to purchase any
securities or the solicitation of an offer to buy any securities,
pursuant to the Offer or otherwise. The Offer will be made solely
by means of the Offer Document, which will contain the full terms
of the Offer, including details of how to accept the Offer.
Shareholders are urged to read the Offer Document when it becomes
available because it will contain important information relating to
the Offer.
Your attention is drawn to the further information contained in
the Appendices which form part of this announcement.
The conditions to the Offer set out in Appendix I to this
announcement form part of, and should be read in conjunction with,
this announcement.
Appendix II to this announcement contains definitions of certain
terms in this announcement.
The Offer will be subject to the applicable requirements of the
Code.
Publication on website and availability of hard copies
A copy of this announcement will be made available, free of
charge, at www.dhirindia.com and www.acornglobalinvestments.net by
no later than 12 noon (London time) on 21 December 2011.
You may request a hard copy of this announcement, free of
charge, by contacting Acorn on +44 7776 181 400. You may also
request that all future documents, announcements and information to
be sent to you in relation to the Offer should be in hard copy
form.
In accordance with Rule 26.1 of the Code, copies of the
following documents will also be published on the websites of Acorn
and DII referred to above by no later than 12 noon (London time) on
21 December 2011:
- the memorandum and articles of association of DII;
- the audited consolidated accounts of DII for the two years
ended 31 March 2011;
- the half-yearly report of DII for the six months ended 30
September 2011;
- the material contract of DII referred to in the Offer
Document;
- the Offer Document and the Form of Acceptance.
- the memorandum and articles of association of Acorn;
- the F1 Global Loan referred to in the Offer Document;
- the escrow agreement referred to in the Offer Document;
and
- the written consents of Cairn Financial Advisers and Evolution
Securities referred to in the Offer Document.
Enquiries:
Acorn Global Investments Limited
Anup N Dalal +44 7776 181 400
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Cairn Financial Advisers LLP - Financial Advisers
to Acorn
Tony Rawlinson / Jo Turner +44 20 7148 7900
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Dhir India Investments plc
Charlie Hambro +44 7776 196 674
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Evolution Securities - Nominated Adviser to
DII
Jeremy Ellis /Patrick Castle +44 20 7071 4300
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Cairn Financial Advisers, which is authorised and regulated in
the United Kingdom by the Financial Services Authority, is acting
exclusively for Acorn and no-one else in connection with the Offer.
Cairn Financial Advisers will not be responsible to anyone other
than Acorn for providing the protections afforded to clients of
Cairn Financial Advisers or for giving advice in relation to the
Offer or the content of, or any matter or arrangement referred to
in, this announcement.
Evolution Securities, which is authorised and regulated in the
United Kingdom regulated by the Financial Services Authority, is
acting exclusively for DII, and no one else in connection with the
Offer and will not be responsible to anyone other than DII for
providing the protection afforded to clients of Evolution
Securities or for giving advice in relation to the Offer or the
content of this announcement or any transaction or arrangement
referred to herein.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i)
the offeree company and (ii) any paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any paper offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the
offeree company or of any paper offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified.
If you are in any doubt as to whether you are required to make
an Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0) 20 7638
0129.
APPENDIX I: CONDITIONS OF THE OFFER
1. The Offer is subject to the following conditions:
1.1 valid acceptances of the Offer being received (and not,
where permitted, withdrawn) by no later than 1.00 p.m. (London
time) on the First Closing Date (or such later time(s) and/or
date(s) as Acorn may, with the consent of the Panel or in
accordance with the Code, decide) in respect of DII Shares which,
together with DII Shares acquired or agreed to be acquired before
such time(s), will result in Acorn and/or any person acting in
concert with it holding DII Shares carrying, in aggregate, more
than 50 per cent. of the voting rights then normally exercisable at
a general meeting of DII, including (to the extent, if any,
required by the Panel for this purpose) any such voting rights
attaching to any DII Shares that are unconditionally allotted or
issued before the Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise; and for this
purpose shares which have been unconditionally allotted, whether
pursuant to the exercise of any outstanding conversion or
subscription rights or otherwise, shall be deemed to carry the
voting rights which they will carry upon being registered in the
register of members of DII;
1.2 no government or governmental, quasi governmental,
supranational, statutory, regulatory, environmental or
investigative body, court, trade agency, association, institution,
or any other body or person whatsoever in any jurisdiction (each an
"Authority") having, without the consent or agreement of Acorn,
prior to the date when the Offer becomes otherwise unconditional in
all respects, decided to take, instituted, implemented or
threatened any action, proceedings, suit, investigation, enquiry or
reference, or made, proposed or enacted, any statute, regulation,
decision or order, or taken any other steps which would or might
reasonably be expected to:
(a) require, prevent or delay the divestiture by any member of
the Wider DII Group or Acorn of all or a material portion of their
respective businesses, assets or properties or impose any material
limitation on the ability of any of them to conduct all or any
material portion of their respective businesses or own all or any
material portion of their respective assets or properties;
(b) impose any limitation on, or result in a delay in, the
ability of Acorn directly or indirectly to acquire or to hold or to
exercise effectively, directly or indirectly, all or any rights of
ownership of shares in DII or on the ability of any member of the
Wider DII Group or Acorn to hold or exercise effectively, directly
or indirectly, all or any rights of ownership of shares or loans or
securities convertible into shares or any other securities (or the
equivalent) in any member of the Wider DII Group or to exercise
management control over any such member of the Wider DII Group to
an extent which is material in the context of the Offer;
(c) save pursuant to the Offer, require Acorn to offer to
acquire any shares or other securities or interest in DII or any
member of the Wider DII Group owned by any third party where such
an acquisition would be material in the context of DII or the Wider
DII Group taken as a whole;
(d) make the Offer or its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or
control of, DII void, illegal, and/or unenforceable under the laws
of any relevant jurisdiction, or otherwise, directly or indirectly,
restrain, restrict, prohibit or delay the same, or impose
additional conditions or obligations with respect thereto, or
otherwise challenge, or require amendment of, the Offer to an
extent which is material in the context of the Offer; or
(e) otherwise adversely affect the business, assets,
liabilities, financial or trading position, profits or prospects of
Acorn or any member of the Wider DII Group in a manner which is
material in the context of the Wider DII Group or of the
obligations of Acorn in connection with the Offer in each case
taken as a whole,
and all applicable waiting and other time periods during which
any Authority could decide to take, institute, implement or
threaten any such action, proceeding, suit, investigation or
enquiry having expired or been terminated;
1.3 all necessary filings having been made in connection with
the Offer and all statutory or regulatory obligations in any
relevant jurisdiction having been complied with in connection with
the Offer or the acquisition by Acorn of any shares or other
securities in, or control of, DII and all necessary waiting periods
under any applicable legislation or regulations of any relevant
jurisdiction having expired, lapsed or been terminated (as
appropriate) and all authorisations, orders, recognitions, grants,
consents, licences, confirmations, clearances, permissions and
approvals necessary or appropriate in respect of the Offer and the
proposed acquisition of any shares or other securities in, or
control of, DII by Acorn having been obtained in terms and in a
form satisfactory to Acorn (acting reasonably) from all relevant
Authorities or persons with whom any member of the Wider DII Group
has entered into contractual arrangements and all such
authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, permissions and approvals, together with
all authorisations, orders, recognitions, grants, licences,
confirmations, clearances, permissions and approvals necessary to
carry on the business of any member of the Wider DII Group,
remaining in full force and effect and all filings necessary for
such purpose having been made and there being no notice of any
intention to revoke or not to renew the same at the time at which
the Offer becomes otherwise unconditional (where such revocation or
failure to renew would be material in the context of the Wider DII
Group, taken as a whole) and all necessary statutory or regulatory
obligations in any relevant jurisdiction having been complied with
in all material respects;
1.4 save as Disclosed, there being no provisions of any
arrangement, agreement, licence, permit or other instrument to
which any member of the Wider DII Group is a party or by or to
which any such member or any of its assets may be bound, entitled
or subject and which, in consequence of the Offer, or the proposed
acquisition of any shares or other securities in DII or because of
a change in the control or management of DII or otherwise, could or
might reasonably be expected to result, to an extent in each case,
which would be material in the context of the Wider DII Group taken
as a whole, in:
(a) any monies borrowed by, or any other indebtedness (actual or
contingent) of or grant available to, any such member, being or
becoming repayable or capable of being declared repayable
immediately or earlier than their or its stated maturity date or
repayment date or the ability of such member to borrow monies or
incur any indebtedness being withdrawn or inhibited;
(b) the creation of any mortgage, charge or other security
interest over the whole or any part of the business, property or
assets of any such member or any such security (whenever arising or
having arisen) becoming enforceable;
(c) any such arrangement, agreement, licence, permit or
instrument or the rights, liabilities, obligations or interests
thereunder of DII or any such member of the Wider DII Group being
terminated or adversely modified or any action being taken or any
obligation or liability arising thereunder that is material in the
context of the Offer;
(d) any assets or interests of any such member being or falling
to be disposed of or charged or any right arising under which any
such asset or interest could be required to be disposed of or
charged;
(e) the rights, liabilities, obligations, interests or business
of any such member in or with any firm or body or, in the case of a
business any arrangements relating to such interest or business,
being terminated or adversely modified or affected;
(f) any such member ceasing to be able to carry on business
under any name under which it presently does so;
(g) the value or financial or trading position or prospects of
DII or any member of the Wider DII Group being prejudiced or
adversely affected; or
(h) the creation of any liability, actual or contingent, by any
such member otherwise than in the ordinary course of business;
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit, or other instrument to
which any member of the Wider DII Group is a party or by or to
which any such member or any of its assets is bound, entitled or
subject, would result in any of the events or circumstances as are
referred to in sub paragraphs 1.4(a) to 1.4(h) above;
1.5 save as Disclosed, no member of the Wider DII Group since 31 March 2011 having:
(a) issued or agreed to issue or authorised or proposed the
issue or grant of additional shares of any class, or securities
convertible into, or rights, warrants or options to subscribe for
or acquire any such shares or convertible securities;
(b) other than to a wholly-owned member of the DII Group,
recommended, declared, paid, made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution
whether payable in cash or otherwise;
(c) issued, authorised or proposed the issue of any debentures,
save in the ordinary course of business, or incurred or increased
any indebtedness or become subject to any contingent liability
which is material in the context of the Wider DII Group as a
whole;
(d) entered into or offered to enter into (which remains open
for acceptance) any contract, any reconstruction or amalgamation,
any transaction or arrangement otherwise than in the ordinary
course of business which in any such case is material in the
context of the Wider DII Group as a whole;
(e) entered into an agreement, contract, arrangement or
commitment or passed any resolution or made any offer (which
remains open for acceptance) with respect to any of the
transactions or events referred to in this paragraph which in any
such case is material in the context of the Wider DII Group as a
whole;
(f) entered into or materially varied or made an offer (which
remains open for acceptance) to enter into or materially vary, the
terms of any service agreement with any director, or (other than in
the ordinary course of business) with any senior executive of the
Wider DII Group;
(g) entered into or offered to enter into (which offer remains
open for acceptance) any agreement which consents to the
restriction of the scope of the business of any member of the Wider
DII Group which is material in the context of the Wider DII Group
and Acorn as a whole;
(h) waived or compromised any claim otherwise than in the
ordinary course of business which is material in the context of the
Wider DII Group taken as a whole;
(i) terminated or varied the terms of any agreement or arrangement between any member of the Wider DII Group and any other person in a manner which would or might reasonably be expected to have a material adverse effect on the financial position of the Wider DII Group taken as a whole;
(j) entered into or varied or authorised, or offered (which
offer remains open for acceptance) to enter into or vary any
contract, transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, onerous or
unusual nature or magnitude or which is restrictive to the
businesses of any member of the Wider DII Group or which involves
an obligation of such a nature or magnitude which is material in
the context of the Wider DII Group as a whole;
(k) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or made any other material change to any part of its
share capital;
(l) taken or proposed any corporate action or (to an extent
which is material in the context of the Wider DII Group taken as a
whole) had any legal proceedings or other steps started or taken or
threatened against it for its winding up (voluntary or otherwise),
dissolution or reorganisation or for the appointment of a receiver,
administrative receiver, administrator, trustee or similar officer
of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or had any such person
appointed;
(m) save for transactions between wholly owned members of the
Wider DII Group, merged with any body corporate or acquired or
disposed of or demerged or transferred, mortgaged or charged or
created any security interest over any material assets or any
right, title or interest in any material asset (including shares in
subsidiaries, associates and trade investments) or authorised or
proposed or announced any intention to propose any merger,
demerger, acquisition or disposal, transfer, mortgage or charge or
security interest or change in its loan capital, as aforesaid
(other than in the ordinary course of business) which in any such
case is material in the context of the Offer;
(n) made any alterations to its articles of association;
(o) been unable or admitted in writing that it is unable to pay
its debts or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or ceased or threatened to
cease carrying on all or a substantial part of any business which
is material in the context of the Wider DII Group as a whole or in
the context of the Offer.
1.6 since 31 March 2011 and save as Disclosed:
(a) there having been no adverse change or deterioration in the
business, assets, financial or trading position or profits of DII
or any other member of the Wider DII Group in each case which is
material in the context of the Wider DII Group taken as a
whole;
(b) there having been no litigation, arbitration proceedings,
prosecution or other legal proceedings to which any member of the
Wider DII Group is or could reasonably be expected to become a
party (whether as plaintiff or defendant or otherwise), no such
proceedings having been threatened in writing against any member of
the Wider DII Group and no investigation by an Authority against or
in respect of any member of the Wider DII Group having been
instituted, threatened or announced by or against or remaining
outstanding in respect of any member of the Wider DII Group which
in any such case might adversely affect any member of the Wider DII
Group in any way which is material in the context of the Wider DII
Group taken as a whole;
(c) no contingent or other liability having arisen which would
be reasonably likely materially and adversely to affect the Wider
DII Group taken as a whole; or
(d) no steps having been taken which are likely to result in the
withdrawal, cancellation, termination or modification of any
licence held by any member of the Wider DII Group which is
necessary for the proper carrying on of its business and where such
withdrawal, cancellation, termination or modification would be
material in the context of the Wider DII Group, taken as a
whole;
1.7 save as Disclosed, Acorn not having discovered after the date of this announcement:
(a) that any financial, business or other information concerning
the Wider DII Group that is material in the context of the Offer as
contained in the information publicly disclosed at any time by any
member of the Wider DII Group, is materially misleading, contains a
material misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not materially
misleading which has not been corrected and which is material in
the context of the Wider DII Group taken as a whole;
(b) that any member of the Wider DII Group is subject to any
liability (contingent or otherwise) which is not disclosed in the
Annual Report and Accounts of DII for the financial year ended 31
March 2011 and which is material in the context of DII or the Wider
DII Group taken as a whole;
(c) that any past or present member of the Wider DII Group has
not complied with any and all applicable laws and regulations of
any relevant jurisdiction relating to an emission, disposal,
discharge, deposit, spillage or leak of waste or hazardous or
harmful substances on or about or from any land or property of any
description or other asset now or previously owned, occupied or
made use of by any past or present member of the Wider DII Group
which non compliance would be reasonably likely to give rise to any
liability (whether actual or contingent) on the part of any member
of the Wider DII Group which would be material in the context of
the Wider DII Group taken as a whole; and
(d) that there is or is likely to be, for that or any other
reason whatsoever, any liability (whether actual or contingent) of
any past or present member of the Wider DII Group to or requirement
to make good, repair, reinstate or clean up any property now or
previously owned, occupied or made use of by any past or present
member of the Wider DII Group which is material in the context of
the Wider DII Group taken as a whole.
2. Acorn reserves the right to waive all or any of conditions
1.2 to 1.7 (inclusive) above, in whole or in part. Except with the
consent of the Panel, the Offer will lapse unless conditions 1.2 to
1.7 (inclusive) of the Offer set out above are fulfilled or, if
capable of waiver, waived or, where appropriate, have been
determined by Acorn in its opinion to be or to remain satisfied by
midnight on the date which is 21 days after the later of the First
Closing Date and the date on which condition 1.1 is satisfied.
Acorn shall be under no obligation to waive (if capable of waiver),
to determine to be or remain satisfied or to treat as fulfilled or
satisfied any of conditions 1.2 to 1.7 (inclusive) by a date
earlier than the latest date specified above for the fulfilment or
satisfaction of that condition notwithstanding that the other
conditions of the Offer may at such earlier date have been waived
or fulfilled or satisfied and that there are at such earlier date
no circumstances indicating that any such conditions may not be
capable of fulfilment or satisfaction.
3. If the Offer lapses, the Offer will cease to be capable of
further acceptance and Acorn and holders of DII Shares shall
thereupon cease to be bound by acceptances made on or before the
date on which the Offer so lapses.
4. If Acorn is required by the Panel to make an offer for DII
Shares under the provisions of Rule 9 of the Code, Acorn may make
such alterations to the conditions as are necessary to comply with
the provisions of that Rule.
5. DII Shares acquired under the Offer will be acquired with
full title guarantee, fully paid and free from all liens, charges,
equitable interests, encumbrances, options, rights of pre-emption
and any other third party rights and interests of any nature and
together with all rights now or hereafter attaching or accruing to
them, including, without limitation, voting rights and the right to
receive and retain in full all dividends and other distributions
(if any) declared, made or paid on or after 20 December 2011.
Accordingly, insofar as a dividend and/or a distribution and/or a
return of capital is proposed, declared, made, paid or payable by
DII in respect of a DII Share on or after 20 December 2011, the
price payable under the Offer in respect of a DII Share will be
reduced by the amount of the dividend and/or distribution and/ or
return of capital except insofar as the DII Share is or will be
transferred pursuant to the Offer on a basis which entitles Acorn
alone to receive the dividend and/or distribution and/or return of
capital and to retain it. To the extent that a reduction in the
price payable pursuant to the Offer in respect of a DII Share is to
apply in respect of a dividend and/or distribution and/or return of
capital but that reduction in price has not been effected, the
person to whom the Offer Price is paid in respect of that DII Share
will be obliged to account to Acorn for the amount of such dividend
or distribution or return of capital.
APPENDIX II: DEFINITIONS
"Acorn board" means the board of directors of Acorn
as at the date of this
announcement;
"Acorn" means Acorn Global Investments Limited,
a company incorporated under the BVI
Business Companies Act 2004, with the
BVI Company Number 1674636;
"Admission" means the admission of DII Shares to
trading on AIM on 12 July 2007;
"Admission Document" means the document originally published
by the Company in
connection with its admission to AIM;
"AIM Rules" means the rules applicable to companies
whose shares are traded on AIM published
by the London Stock Exchange, as amended
from time to time;
"AIM" means the market of that name which
is operated by the London Stock Exchange;
"business day" means a day, not being a public holiday,
Saturday or Sunday on which banks in
London are open for business;
"Cairn Financial Advisers" means Cairn Financial Advisers LLP,
61 Cheapside, London EC2V 6AX;
"Closing Price" means the middle-market closing price
of a DII Share on the date in question
as derived from the AIM appendix to
the Daily Official List;
"Code" or "City Code" means the City Code on Takeovers and
Mergers;
"DII" or "Company" means Dhir India Investments plc, a
company incorporated in the Isle of
Man with registered number 120065C;
"DII board" means the board of directors of DII,
as at the date of this announcement;
"DII Group" means the Company, its subsidiaries
and its other subsidiary undertakings
from time to time and, where the context
permits, each of them;
"DII Shares" means the existing unconditionally
allotted or issued and fully paid ordinary
shares of GBP0.10 each in the capital
of the Company and any further such
shares which are unconditionally allotted
or issued before the time at which
the Offer ceases to be open for acceptance
but excluding in both cases any such
shares held or which become held in
treasury;
"Disclosed" means (i) as disclosed in the Annual
Report and Accounts of DII for the
year ended 31 March 2011 or (ii) publicly
announced by DII (by the delivery of
an announcement through a Regulatory
Information Service) prior to 20 December
2011;
"Evolution Securities" means Evolution Securities Ltd (company
number: 2316630) whose registered office
is 9th floor, 100 Wood Street, London,
EC2V 7AN;
"F1 Global" means F1 Global Resources Inc, a limited
company incorporated under the BVI
Business Companies Act, 2004 in the
British Virgin Islands under company
number 1667910;
"F1 Global Loan" means a loan agreement dated 15 December
2011 between F1 Global (1) and Acorn
(2) pursuant to which F1 Global lent
a principal amount of GBP6,650,000
to Acorn in order to fund the acquisition
of some or all of the share capital
of DII;
"First Closing Date" means the date which is 1.00 p.m. on
the date 22 days after the day of posting
of the Offer document being 11 January
2012;
"Form of Acceptance" means the Form of Acceptance and authority
for use by DII
Shareholders who hold their DII Shares
in certificated form in connection
with the Offer;
"Independent Directors" means each of the directors of DII
or "Independent Directors as at the date of this announcement
of DII" other than Mr Alok Dhir;
"London Stock Exchange" means London Stock Exchange plc or
its successor;
"NAV" means the net asset value of the Group's
investments;
"NPA" means non-performing assets;
"Offer" means the cash offer to be made by
Cairn Financial Advisers, on behalf
of Acorn, to acquire the whole of the
issued and to be issued share capital
of DII not otherwise held by Acorn
on the terms and subject to the conditions
to be set out in the Offer Document;
"Offer Document" means the offer document to be published
which will contain the Offer;
"Offer Price" means 42 pence per DII Share;
"Offer" means the cash offer to be made by
Cairn Financial Advisers, on behalf
of Acorn, to acquire the whole of the
issued and to be issued share capital
of DII not otherwise held by Acorn
on the terms and subject to the conditions
to be set out in the Offer Document;
"Panel" or "Takeover the Panel on Takeovers and Mergers;
Panel"
"SARFAESI Act" means the Securitisation and Reconstruction
of Financial Assets and Enforcement
of Security Interests Act 2002 of India;
"Shareholder(s)" or registered holder(s) of DII Shares;
"DII
Shareholder(s)"
"Shiva" means Shiva Consultants Private Limited,
a company incorporated in the Republic
of India with registered number
U74899DL1986PTC025421, of which Mr
Alok Dhir is a director and, along
with his associates, the 100 per cent.
shareholder;
"subsidiary" and "subsidiary has the meaning given in the Companies
undertaking" Act;
"UK" or "United Kingdom" means United Kingdom of Great Britain
and Northern Ireland; and
"Wider DII Group" means DII, any parent, subsidiary and
associated undertakings of DII, any
subsidiary undertakings of any parent
undertakings of DII and any subsidiary
undertakings in which DII and any such
subsidiary and associated undertakings
(aggregating their interests) have
a significant interest.
All references to legislation in this Offer Document are to
English legislation unless the contrary is indicated. Any
references to any provision of any legislation shall include any
amendment, modification, extension or re-enactment thereof.
All times referred to are London times unless otherwise stated.
Words in this announcement importing the singular shall include the
plural and vice versa.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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