1. CORPORATE RESTRUCTURING - Role of Stock Exchanges Pavan Kumar Vijay

2. TYPES OF RESTRUCTURING REDUCTION OF CAPITAL MERGER DEMERGER

3. MERGER “ Combining of two or more commercial organizations into one in order to increase efficiency and sometimes to avoid competition ”. MERGER REVERSE MERGER “ As a commercial term, it means when a Healthy Company (in terms of size, capital or listed company)is merging in a Weak Company (in terms of size, or unlisted)”. SECTION 391-394 of Companies Act, 1956

4. DEMERGER “ Separation of a large Company into two or more smaller organisation” SECTION – 2(19AA) of Income Tax Act, 1961.

5. “ Extinguishing or Reducing the liability of members to the extent it is in excess of the needs of the Company” REDUCTION OF CAPITAL SECTION – 100 – 105 of Companies Act, 1956 SECTION 100 to 105 of Companies Act, 1956

7. STOCK EXCHANGE’S ROLE REQUIREMENTS PERSPECTIVE Listing Agreement Compliances Stock Exchange Norms Observations Compliance of Other laws

8. Listing Agreement Compliances “ The Company agrees that it shall file any scheme/petition proposed to be filed before any Court or Tribunal under Sections 391, 394 and 101 of the Companies Act, 1956, with the stock exchange, for approval , at least a month before it is presented to the Court or Tribunal.” Clause 24(f)

9. Clause 24(a) “ The Company agrees to obtain ‘in-principle’ approval for listing from the exchanges having nationwide trading terminals where it is listed, before issuing further shares or securities .” Listing Agreement Compliances.. contd

10. Clause 40A Listing Agreement Compliances..contd “ The Company should pursuant to merger & demerger should comply with Continuous Listing requirements.”

11. Stock Exchange’s Norms Presently, Stock Exchange(s) are laying various other norms before giving approval to the Companies for ‘ Merger ’, ‘ Demerger ’ ‘ Reduction of Capital ’

14. Stock Exchange Norms..contd LOCK IN REQUIRMENTS “ 25% of the newly issued capital pursuant to the scheme of amalgamation should be kept under lock in for 3 yrs from the date of listing” “ The lock in period are varied by the stock exchange on case to case basis” *BSE Stipulations

15. Compliance of Other Laws “ The Stock Exchange(s) alongside considers the compliance of other laws, regulations, rules etc applicable on the Company ”

16. Compliance of Other laws..contd SEBI (SAST)REGULATIONS ,1997 Regulation 3(1)(j)(ii) provides an exemption for acquisition of shares: “ Nothing contained in regulations 10, 11 and 12 of these regulations shall apply to shares acquired Pursuant to a scheme : (ii) of arrangement or reconstruction including amalgamation or merger or demerger under any law or regulation, Indian or foreign;”

18. I SSUES

23. DEMERGER Global Fuel Management Ltd Reliance Capital Ventures Ltd

29. ISSUES

32. Case Studies

36. Benefit to Shareholder 11,120 Net benefit (B-A) 16,620 Total (B) 4,120 51.5 shares @ Rs 80 Shares in MTL 12,500 100 shares @ Rs125 Shares in MRL Shareholder's value on allotment & Listing of shares of MTL (as on 24th March 2005 ) 5500 100 shares @Rs 55 Value of the shares held by a shareholder as on record date (5 th Jan,2004) (A) Amount (Rs.) Particulars

37. Benefit to Shareholder- Current Worth 99,907 Total 5,407 51.5 shares @ Rs 105 Shares in MTL 94500 100 shares @Rs 945 Shares in MRL Current Worth (as on 25 th May 2006)

38. REDUCTION OF CAPITAL

39. Types of Reduction of Capital Writing off Losses & Assets Correction of Over- Capitalization Distinguishment of the Liability in respect of unpaid portion of face value. Distribution of accumulated profits by Payment to shareholders a part of share capital.

40. Reduction of Capital- A Strategic Step Use to Clean the Balance Sheet To rationalize the capital base Revival of Sick Company

41. RESTRUCTURING STRATEGIES What's Your Move??

42. FEW STRATEGIC MOVES LISTING CONSOLIDATION OF RESOURCES INCREASING PROMOTERS’ HOLDING

45. Merger