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Dhir India Inv. plc (DHIR)

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Tuesday 20 December, 2011

Dhir India Inv. plc

Offer

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 £7 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 £785,795 of equity and £6.65 million of debt. Of this, £7 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 £12.3 million. Other than trade creditors and other liabilities of £675,000 and deferred tax liabilities of £485,000 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 £25 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 £17.99 million.

 

Financing of the Offer

 

The Offer is being financed by Acorn through a combination of shareholder funds and a £6.65 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

Cairn Financial Advisers LLP - Financial Advisers to Acorn

Tony Rawlinson / Jo Turner

 

+44 20 7148 7900

Dhir India Investments plc

Charlie Hambro

 

+44 7776 196 674

Evolution Securities - Nominated Adviser to DII

Jeremy Ellis /Patrick Castle

 

+44 20 7071 4300

 

 

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 £0.10 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 £6,650,000 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" or "Independent Directors of DII"

means each of the directors of DII as at the date of this announcement 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 Panel''

the Panel on Takeovers and Mergers;

 

''SARFAESI Act''

means the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act 2002 of India;

 

''Shareholder(s)'' or ''DII

Shareholder(s)''

 

registered holder(s) of DII Shares;

''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

undertaking''

 

has the meaning given in the Companies 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
 
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