Paramhans Pharmaceuticals Ltd. is a listed company but the management decided to get the shares in the Company delisted from the stock exchange. The Directors desire to seek advice how to fix offer price. In the meantime

CS Professional · Corporate Restructuring, Valuation and Insolvency · PYQS · December 2019
Paramhans Pharmaceuticals Ltd. is a listed company but the management decided to get the shares in the Company delisted from the stock exchange. The Directors desire to seek advice how to fix offer price. In the meantime Corporate Insolvency Resolution Process (CIRP) is initiated and a Resolution Plan has been resolved by the Committee of Creditors and awaiting approval of the Adjudicating Authority — Offer your advice.

Answer & Explanation:

The problem stated in question has two scenarios - one is when the company is not a defaulter as per Insolvency and Bankruptcy Code, 2016 and the other is when it is in the Corporate Insolvency Resolution Process (CIRP). In case of former, offer price is determined through book building as per Securities Exchange Board of India (Delisting of Equity Shares) Regulations, 2009. Final offer price shall be the price at which the maximum number of shares are tendered by equity holders. In case of latter, regulations were amended in 2018, the price shall be as per Tribunal approved Resolution Plan subject to that the price shall not be less than the liquidation value as determined by the Registered Valuer.

Topics: Delisting of Shares

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