NDTV Move To Block Adani's 'Hostile' Takeover? Says SEBI Approval Necessary For Adani Group Arm To Secure RRPR Stake

In an move apparently aimed to block Adani Group from proceeding ahead with its 'hostile' takeover, NDTV on Thursday (25 August) informed the stock exchanges that an approval from Security and Exchange Board of India (SEBI) is necessary for Adani Group's subsidiary to acquire secure 99.5 per cent interests in Radhika Roy Pranav Roy Holding (RRPRH) private limited, the promoter group vehicle of the company.

The company in a regulatory filing said that the SEBI approval was required as its founders-promoters, Pranav Roy and Radhika Roy, are barred from trading in securities markets.

NDTV noted that the SEBI on 27 November 2020 had restrained its Founder-Promoters Prannoy Roy and Radhika Roy from accessing the securities market.

It further prohibited buying, selling, or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner whatsoever for a period of 2 years, which expires on 26 November 26 2022, the company said.

"Unless pending appeal proceedings were to successfully conclude prior, SEBI approval is necessary for the proposed Acquirer [VCPL] to secure 99.5% interests in the Promoter Group vehicle [RRPRH], since this would consequently lead to acquisition of voting rights in respect of 29.18% of the issued share capital of the Target Company [NDTV] held by the Promoter Group vehicle [RRPRH]," NDTV said.

It should be noted that Vishvapradhan Commercial Private Limited (VCPL), a newly acquired wholly owned subsidiary of Adani Group's AMG Media Networks Limited (AMNL), on Tuesday (23 August) announced that it has exercised the rights to acquire 99.5 per cent of the equity shares of RRPR Holding Private Limited, a promoter group company of NDTV.

After exercising the rights, AMNL also announced an open offer for buying another 26 per cent stake in the Television network.

Responding to the development on Tuesday, NDTV said that the acquisition was executed without any input from, conversation with, or consent of NDTV founders Prannoy Roy and Radhika Roy.

Radhika and Pranav Roy continue to hold 32.26 per cent stake in NDTV.

Meanwhile, RRPRH, which owns 29.18 per cent of NDTV, has been told to transfer within two days all its equity shares to VCPL.

The VCPL had in 2009 and 2010 loaned Rs 403.85 crore to NDTV promoter company RRPR Holding Pvt Ltd.

RRPR Holding was owned by NDTV founder Pranav Roy and Radhika Roy.

RRPR Holding, which was a promoter group entity and then held only 7.56 per cent stake in NDTV, took the loan on behalf of NDTV from VCPL in two tranches (Rs 350 crore in July 2009 and another Rs 53 crore in January 2010).

Against this interest-free loan, RRPR issued warrants to VCPL entitling it to convert them into a 99.9 per cent stake in RRPR.

VCPL had raised funds from Reliance Strategic Ventures, a wholly-owned subsidiary of Mukesh Ambani-led Reliance Industries Ltd, to extend the loan to RRPR, reports Indian Express.

The loan agreement also required Prannoy Roy and Radhika Roy, who together held 55.5 per cent in NDTV at the end of June 2009, to transfer some of their shares to RRPR Holdings.

Due to these terms, RRPR Holdings’ stake in NDTV increased to 29.18 per cnet by January 2010.