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Offer letter for buy-back of equity shares
LETTER OF OFFER FOR BUY-BACK OF EQUITY SHARES OF _______________________PRIVATE LIMITED
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
This Letter of Offer dated ____, 2018 (the “Letter of Offer”) is being sent to you as a registered equity shareholders of ___________________ Limited (the “Company”), as on the Record Date _______-, 2018 in accordance with the Companies (Share Capital and Debentures) Rules, 2014.
Contact Person: ______________ (designation)
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Offer Opening Date:______, 2018 Offer Closing Date:______, 2018 |
CASH OFFER FOR BUY-BACK OF UP TO ______ (________________) FULLY PAID EQUITY SHARES AT A PRICE OF INR ______/- (INDIAN RUPEES ____________ ONLY) PER EQUITY SHARE REPRESENTING __% OF THE TOTAL NUMBER OF EQUITY SHARES IN THE PAID-UP EQUITY SHARE CAPITAL OF ___________ PRIVATE LIMITED.
The Form of Acceptance-cum-Acknowledgement (“Acceptance Form”) is enclosed together with this Letter of Offer. The Eligible Shareholders are requested to send the Acceptance Form, marking the envelope as “Kwench Global Technologies Private Limited Buy-back Offer”, to the concerned person, address as per the instructions incorporated in the Acceptance Form.
LAST TIME/DATE OF RECEIPT OF COMPLETED OFFER FORMS: _____ (IST) ON _______________.
1. THE OFFER AND BUY-BACK PRICE
1.1 ______________ Private Limited hereby announces its offer to buy-back up to ____ (___) fully paid-up equity shares of face value of INR 10/- (Indian Rupees _____ Only) each (hereinafter referred to as the “Equity Shares”), at a price of INR _____/- (Indian Rupees ________ Only) per Equity Share (the “Offer Price”) for an aggregate maximum amount of INR __________ /- (Indian Rupees _________________ Only), which is less than 25% of the total paid-up equity share capital and free reserves of the Company as per latest un-audited accounts of the Company as at March 31, 2018, through buyback offer to its existing shareholders on a proportionate basis (the “Buy-back Offer”). The Equity Shares proposed to be bought back constitute ___% (____ per cent) of the total number of equity shares in the paid-up equity share capital of the Company.
1.2 The funds for the implementation of the proposed Buyback will be sourced out of the free reserves of the Company (including securities premium account).
2. AUTHORITY FOR THE BUY-BACK
The Buy-back Offer is pursuant to Rule 17 of the Companies (Share Capital and Debentures) Rules, 2014 (including any statutory modification and re-enactment thereof, for the time being in force) (the “Share Capital Rules”) as well as in accordance with the provisions of Section 68 of the Companies Act, 2013 (the “Act”) and the provisions contained in Article ___ of the Articles of Association of the Company, and subject to such other approvals, permissions and sanctions as may be necessary to be obtained from statutory authorities, if any.
3. NECESSITY OF THE BUY-BACK
The Buy-back is being undertaken by the Company to rationalize the Company’s capital structure. The Buy-back will help the Company to distribute surplus funds to its Shareholders holding Equity Shares broadly in proportion to their shareholding, thereby, enhancing the overall return to the shareholders.
4. PROCESS AND METHODOLOGY TO BE ADOPTED FOR THE BUY-BACK
4.1 This Letter of Offer is being sent to the Equity Shareholder(s)/ Beneficial Owner(s) of Equity Shares of the Company as on the Record Date, i.e. _______, 2018 to (the “Eligible Shareholders”). During the Buy-back Offer, the Eligible Shareholders who intend to tender their Equity Shares in the Buy-back would be required to send a duly filled-in the Acceptance Form along with the relevant enclosures, to Mr. ___________, (Concerned person) at
Acceptance Forms which are incomplete, or without the requisite enclosures as mentioned in the Acceptance Form, or otherwise not duly filled, will NOT be accepted.
4.2 The Company shall complete the verifications of the Offer Forms received within the time period prescribed under the Companies (Share Capital and Debentures) Rules, 2014 and the Equity Shares lodged shall be deemed to be accepted unless a communication of rejection is made within 21 (twenty one) days from the closure of the Buy-back Offer.
4.3 The payment of consideration to eligible equity shareholders shall be made through issue of Cheque /electronically through Direct Credit/ NEFT/ RTGS/ NECS (subject to availability of all information for crediting the funds). If the required information is not available with the Company, then payment will be made through demand drafts/ pay order, or similar instruments.
4.4 The Company may accept any number of equity Shares tendered in excess of the buyback entitlement by the eligible shareholder without obtaining any further approval from the members subject to compliance of the provisions of Buy Back. In case of non-receipt of your acceptance for the buy-back offer on or before the close of the business hours on 05.00 p.m. (IST) on August 08, 2018 (“offer closure date”), then the Company shall be of the view that you are not interested in availing the buy-back offer and hence the Board of Directors shall have the power to dispose-off such shares in such a manner as they shall deem fit in the best interest of the Company.
4.5 The Buy-back is subject to approvals, if any, required under the provisions of the Act, the Share Capital Rules, applicable rules and regulations as specified by the Reserve Bank of India (the “RBI”) under the Foreign Exchange Management Act, 1999 and/or such other applicable rules and regulations in force for the time being. Buy-back from Non Resident Shareholders will be subject to approvals, if any, of the appropriate authorities, including RBI, as applicable.
4.6 Non-Resident Indians (“NRI”) and erstwhile Overseas Corporate Bodies (“OCB”) must obtain all approvals required to tender the Equity Shares held by them in this Buy-back (including without limitation the approval from the RBI). The Company will have the right to make payment to the eligible shareholders in respect of whom no prior RBI approval is required and not accept equity shares from the eligible shareholders in respect of whom prior RBI approval is required in the event copies of such approvals are not submitted.
4.7 As of date, there is no other statutory or regulatory approval required to implement the Buy-back other than that indicated above. If any statutory or regulatory approval becomes applicable subsequently, the Buy-back will be subject to such statutory or regulatory approvals.
5. No Defaults
The Company confirms that there are no defaults (either in the past or subsisting) in repayment of deposits, interest payment thereon, redemption of debentures or preference shares, payment of dividend to any member, or repayment of term loans or interest payable thereon to any financial institution or any bank/banking company.
The Company confirms that there are no defaults (either in the past or subsisting) in repayment of deposits, interest payment thereon, redemption of debentures or preference shares, payment of dividend to any member, or repayment of term loans or interest payable thereon to any financial institution or any bank/banking company.
The Buy-Back has been duly authorized by a resolution passed by the members of the Company at its Extraordinary General Meeting held on ___________.
The text of the relevant resolution passed is given below:
“RESOLVED THAT pursuant to the provisions of Section 68 and other applicable provisions, if any, of the Companies Act, 2013 (herein after referred to as the ‘Act’ including any statutory modification or re-enactment thereof, for time being in force) and Rule 17 of The Companies (Share Capital and Debentures) Rules, 2014 (including any statutory modification and re-enactment thereof, for the time being in force) and in accordance with Article __ of the Articles of Association of the Company, the consent of the members of the Company (hereinafter referred to as the “members”) be and is hereby accorded to approve the proposal to buy back ____ (______) number of fully paid up equity shares (representing __% of the total number of equity shares in the paid-up equity share capital of the Company) having face value of INR 10/- (Indian Rupees Ten Only) each, at a price of INR ______/- (Indian Rupees ________Only) per equity share (“Buy Back Offer Price”) out of free reserves and/or securities premium account, from the existing shareholders on a proportionate basis (hereinafter referred to as “Buyback”), subject to the condition that the aggregate amount to be expended by the Company for the said Buyback shall not exceed INR _______ /- (Indian Rupees _________ Only) (“Buyback Offer Size”) which is less than 25% of the total paid-up equity share capital and free reserves of the Company as per latest un-audited accounts of the Company as at March 31, 2018.
RESOLVED FURTHER THAT the board of directors shall have the option of accepting additional equity shares tendered by the eligible equity shareholders (over and above their Buyback Entitlement) in case of shortfall created due to non-participation of some other eligible shareholders, if any.
RESOLVED FURTHER THAT the Board be and is hereby authorized to do or cause to be done all such acts, deeds, matters and things and execute and sign all such documents and papers and provide all such information and confirmations, as may be necessary for the implementation of the Buyback, including but not limited to:
RESOLVED FURTHER THAT the declaration of solvency along with annexures thereof in the prescribed form, placed before the members, as required pursuant to Section 68(6) of the Act and The Companies (Share Capital and Debentures) Rules, 2014, be and is hereby approved for filing with the Registrar of Companies within the prescribed timelines and after having been verified and be signed on behalf of the Board, by any 2 (two) directors of the Company.
RESOLVED FURTHER THAT the letter of offer along with annexures in the prescribed form, placed before the members, as required pursuant to The Companies (Share Capital and Debentures) Rules, 2014 be and is hereby approved for filing with the Registrar of Companies within the prescribed timelines and after having been verified and be signed on behalf of the Board, by any 2 (two) directors of the Company.
RESOLVED FURTHER THAT Buy-back from the equity shareholders who are person resident outside India including the Foreign Institutional Investors, Overseas Corporate Bodies, shall be subject to approvals as required including approvals from Reserve Bank of India under Foreign Exchange Management Act, 1999 and the Rules and Regulations framed thereunder.
RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to digitally sign all the necessary forms required to be filed with the Registrar of Companies, Mumbai, Maharashtra.”
For further details regarding the Buy-back Offer, please refer to Form SH-8 annexed below. A copy of Form SH-8 has also been duly filed by the Company with the Registrar of Companies, Mumbai, Maharashtra in accordance with the relevant provisions of the Act and the Share Capital Rules. The documents referred to in Form SH-8 are available for inspection at the registered office of the Company on all working days between 11.00 a.m. (IST) and 1.00 p.m. (IST).
Encl: a/a
For _______________________
____________
Director
DIN: ________
Address: ____________
_________________
Director
DIN: ________
Address: ____________
Date:
Place:
