Sebi order clears way for proposed Brookfield Deal: Leela promoters

NEW DELHI | MUMBAI: Promoters of Hotel Leelaventure said a Sebi order has held that its proposed transaction with Brookfield was not a ‘related party transaction’ as the latter is simultaneously entering into a separate contract with the promoters for a transfer of the brand. However, the promoters stated that they are disappointed that they have to now go back to shareholders for another round of approval, as it will take more time. “We are happy that the order makes it clear that we can proceed with the transaction,” Vivek Nair, CMD of Hotel Leelaventure, told ET. As per the Sebi order, the proposed asset sale transaction/additional IP transaction between Leelaventure and Brookfield does not qualify as a related party transaction, except for the ‘limb of the transaction’ provided by Leelaventure, along with its promoters/affiliates, with respect to the transfer of the Jamavar trademark to Brookfield. Sebi on Tuesday asked Hotel Leelaventure to put to vote afresh the asset sale transaction before the shareholders, besides providing additional disclosures in its postal ballot notice like details of valuation and additional intellectual property transaction, including the methods adopted by the company. Tobacco-to-hotels conglomerate ITC had challenged the transaction in the National Company Law Tribunal (NCLT) in April, claiming mismanagement and oppression of minority shareholders and had also complained to Sebi about the same. Following the Sebi order, Leelaventure sought more time from NCLT to complete the sale of four hotels to Brookfield Asset Management. On Thursday, Ashish Pyasi of Dhir and Dhir Associates, appearing for Leelaventure, told the court that the process of giving notice to shareholders and conducting a postal ballot was lengthy and sought eight weeks’ time from the tribunal. As per the Sebi order, promoters and the promoter group of Hotel Leelaventure are allowed to participate in the voting process. “Ultimately, the proceeds from the asset sale will go to JM Financial ARC and other lenders, and hence, they should not have any objection when we are seeking time,” Pyasi argued.

from Economic Times https://ift.tt/2GvexQg