Mumbai/New Delhi: The warring founders of InterGlobe Aviation, the company that runs Indi-Go, could have the freedom to sell their shares to any suitor after the shareholders’ agreement (SHA) between them expires in October.
The shareholders’ agreement between Rakesh Gangwal and Rahul Bhatia — which is to remain valid for four years after the company’s initial public offering (IPO) in 2015 — conferred on the founders the right of first refusal (RoFR) for each other’s shares in case one of them wanted tosell. The agreement also contains a ‘tag-along’ clause, which stipulates that the other promoter has the right to join any share-sale transaction and sell his stake along with the one who is exiting.
The RoFR and ‘tag-along’ clause are also enshrined in the company’s Articles of Association (AoA). However, the SHA says the provisions of the agreement will ‘expire on the fourth anniversary of the (company’s IPO)’ except the clause that gives Bhatia controlling rights over the airline. This clause will survive in the AoA. Legal experts said the AoA will need to be amended to reflect the expiry of the shareholders’ agreement.
A person close to Bhatia said no thought has been given to this matter yet. “Not aware of how it will work. The articles have specified clauses, but we will have to look into it,” said the source, who did not want to be identified.
Both the founders have, on many occasions, insisted that they have no plans to sell stakes. But after the SHA expires, they will have the option of selling stakes to a third party. The Bhatia family and Inter-Globe Enterprises (IGE) together own 38.23%, while Gangwal, his wife and a trust hold 36.65%.
Differences between the two promoters became public a while ago when Gangwal wrote to the Securities and Exchange Board of India (Sebi), raising concerns over corporate governance issues at InterGlobe Aviation and related-party transactions between the company and Bhatia’s IGE. Subsequently, the company has decided to finalise a new policy to regulate related-party transactions and to expand its board.
27/07/19 Satish John/Mihir Mishra/Economic Times
To Read the News in full at Source, Click the Headline
The shareholders’ agreement between Rakesh Gangwal and Rahul Bhatia — which is to remain valid for four years after the company’s initial public offering (IPO) in 2015 — conferred on the founders the right of first refusal (RoFR) for each other’s shares in case one of them wanted tosell. The agreement also contains a ‘tag-along’ clause, which stipulates that the other promoter has the right to join any share-sale transaction and sell his stake along with the one who is exiting.
The RoFR and ‘tag-along’ clause are also enshrined in the company’s Articles of Association (AoA). However, the SHA says the provisions of the agreement will ‘expire on the fourth anniversary of the (company’s IPO)’ except the clause that gives Bhatia controlling rights over the airline. This clause will survive in the AoA. Legal experts said the AoA will need to be amended to reflect the expiry of the shareholders’ agreement.
A person close to Bhatia said no thought has been given to this matter yet. “Not aware of how it will work. The articles have specified clauses, but we will have to look into it,” said the source, who did not want to be identified.
Both the founders have, on many occasions, insisted that they have no plans to sell stakes. But after the SHA expires, they will have the option of selling stakes to a third party. The Bhatia family and Inter-Globe Enterprises (IGE) together own 38.23%, while Gangwal, his wife and a trust hold 36.65%.
Differences between the two promoters became public a while ago when Gangwal wrote to the Securities and Exchange Board of India (Sebi), raising concerns over corporate governance issues at InterGlobe Aviation and related-party transactions between the company and Bhatia’s IGE. Subsequently, the company has decided to finalise a new policy to regulate related-party transactions and to expand its board.
27/07/19 Satish John/Mihir Mishra/Economic Times
0 comments:
Post a Comment