SEBI exempts government from making open offer to Vi shareholders

The Securities and Exchange Board of India (SEBI) has exempted the government from making an open offer to the shareholders of Vi, pursuant to its proposed acquisition of over 33 per cent stake in the telecom operator on conversion of dues into equity. The regulator noted that a substantial sum of money is due to be paid to the government by Vi, which may place a potential burden on the financials of the company. Also, an open offer obligation on the part of the government involves huge sums of cash outflow from the Government of India (GoI). Vi had opted for conversion of debt into equity under the government’s bailout package. Vi had filed an application seeking exemption from the open offer requirement with respect to the government acquiring stake in the firm. However, post the transaction, GoI would have 33.44 per cent stake in the telecom operator.

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