Vijay Sheth gets Sebi nod for Great Offshore deal

MUMBAI: The Securities and Exchange Board of India (Sebi) panel has allowed Vijay Sheth, managing director of Great Offshore (GOL), to buy out the 18.5% stake held by the KM Sheth faction in GOL, without triggering an open offer. This paves way for Vijay’s takeover of GOL after two years of its demerger from the parent, GE Shipping, and ending an acrimonious family feud.

He has already tied up around Rs 500 crore debt from GE Capital and IL&FS to fund the purchase, through a pure share-financing arranged by Motilal Oswal. The deal was first reported by ET on June 6.

Mr Sheth had approached the stock market regulator seeking exemption under the Sebi takeover code to purchase shares from his cousins, without making an open offer to the remaining shareholders. Sources said in the case of a transfer of stakes between promoters, the takeover code does not apply, though an exemption from Sebi is necessary.

This follows an informal ‘scheme of arrangement’ reached by the warring Sheth cousins — Vijay, Bharat and Ravi, who own India’s largest private shipping company GE Shipping — under which Ravi Sheth takes majority stake in GOL, in an all-cash deal of around Rs 580 crore.

Ravi Sheth, who owns around 6% in GOL, is all set to buy the 18.5% held by the KM Sheth faction — which includes Bharat, deputy chairman and managing director of GE Shipping, and his younger brother Ravi, director of GE Shipping and managing director of a subsidiary, Greatship India (GIL). Ravi Sheth had agreed to pay Rs 825 per share as per the agreement.

The two investors will provide debt to Delta Housing Company, an investment company owned by Ravi Sheth, to aid the buyout. Ravi Sheth, who holds around 3% stake in GE Shipping, will in turn sell his shares to the KM Sheth faction, for about Rs 134 crore.