Bangalore: Oilfield services firm Great Offshore Ltd has won shareholders’ approval to hand control of its day-to-day affairs, management and policy decisions to Bharati Shipyard Ltd without the need for a fresh open offer, by inducting two nominees of the shipbuilder as executive directors on its board.
Bharati, India’s second largest shipbuilder outside state control, already holds a 49.73% stake in Great Offshore, but that wasn’t enough for it to gain control of day-to-day management. That’s because Bharati made an open offer for Great Offshore shares in December, saying it was doing so as a strategic investor and not to take control of the Mumbai-based firm.
The special resolution has been approved by the shareholders with the requisite majority, Keki M. Elavia, chairman of Great Offshore, said in a statement.
Markets regulator Securities and Exchange Board of India’s takeover norms provide that buyers of a firm do not have to make an open offer to acquire more shares in the company if a special resolution under Regulation 12 (Substantial Acquisition of Shares and Takeover) is passed by the members of the company being bought.
Bharati’s nominees filling two seats gives the shipbuilder a majority of executive directors on Great Offshore’s board.
In May 2009, Great Offshore fell out of the hands of Vijay Kantilal Sheth, its promoter, who had pledged his shares with the promoters of Bharati Shipyard for a Rs240 crore loan. When he failed to repay, Bharati promoters acquired the pledged 14.89% stake.