The Indian company, which is engaged in the publishing of telephone directories with yellow pages and tourist guides, has been under the threat of liquidation and in order to revive the company, its promoters had approached SEAT SPA for acquiring 6 lakh equity shares.

The acquirers filed an application in October 1998 for grant of exemption under Regulation 3(1)(l) of the Sebi (Substantial Acquisition of Shares & Takeovers) Regulations, 1997. The application was forwarded to the takeover panel, which rejected the application on the ground that the acquirers had failed to furnish independent evidence to support their contentions raised in the application. Subsequently, the Italian company furnished additional information.

On furtherconsideration, the panel recommended that the exemption should be granted as the core promoters were keen to revive the company which would be in the interests of all the employees of the company and the shareholders (around 5000). The recommendation also kept in mind that the company's main banker, Canara Bank was considering a short-term credit facility of Rs 100 lakh against the pledge of the entire 600,000 shares bought by SEAT SPA as collateral security in addition to pledging personal fixed deposits to the extent of Rs 15 lakh.

Sebi accepted the panel's recommendations. It also felt that with the share price of Sesa Seat Information quoting at 80 paise (low) and Rs 1.05 (high) on OTCEI, any direction for making a public offer would be detrimental to the interest of the shareholders.