Amid Adani Group’s open bid to acquire New Delhi Television Limited (NDTV), Prannoy Roy and Radhika Roy resigned as directors on the board of RRPR Holding Private Limited (RRPRH).
In a letter on Tuesday, NDTV told the Bombay Stock Exchange, “NDTV has been informed by RRPR Holding Private Limited (RRPRH) of the Promoter Group that the Board of Directors in the meeting held today viz. 29 November 2022, has approved: 1 , Appointment of Mr. Sudipta Bhattacharya (DIN: 0006817333), Mr. Sanjay Pugalia (DIN: 0008360398) and Mr. Senthil Sinniah Chengalvarayan (DIN: 02330757) as directors of the RRPRH Board, with immediate effect; and
2. Resignation of Dr. Prannoy Roy (DIN: 00025576) and Ms. Radhika Roy (DIN: 00025625) as Directors of the Board of RRPRH, with effect from close of business on 29 November 2022.’
RRPRH is named after the two Roys.
What happened in August and how the open offer was triggered
On August 23, Adani Group, led by Gautam Adani, a conglomerate with various business interests, acquired a 29.18 percent stake on TV channel NDTV Ltd and said it would launch an open offer, as required by the Securities and Exchange Board of India (SEBI), to buy another 26 percent of the company. On November 22, Adani Group launched its open offer, which is to remain open until December 5, 2022.
Under the SEBI (Substantial Acquisition of Shares and Takeovers) Rules, the acquirer makes an open offer to the shareholders of the target company inviting them to tender their shares at a specified price and is triggered if the acquirer owns more than 25 per cent of the public equity in the company .
So in the case of NDTV, like Adani Group has emerged as the major shareholder with 29.18 percent shareholding and is likely to change the control structure of the company, it must make an open offer to buy another 26 percent stake so that minority shareholders wishing to exit the company can tender their shares.
On Monday, Reuters reported that an entity backed by the founders of NDTV has issued shares in a unit of the Adani Group, bringing the conglomerate a step closer to acquiring the media firm.
Roy could make a counter bid to stop Adani, but that would require significant financial effort.
How did it all start?
In 2009 and 2010, VCPL gave an interest-free loan of Rs 403.85 crore to RRPR Holding Pvt Ltd, owned by the Roys. Against this loan, RRPR issued warrants to VCPL, which entitled VCPL to convert them into a 99.9 percent stake in RRPR.
Adani was not in the picture at the time. To extend the loan to RRPR, VCPL has raised funds from Reliance Strategic Ventures, a wholly-owned subsidiary of Mukesh Ambani-led Reliance Industries Ltd.
On August 23, Adani Group announced that AMG Media Networks Ltd, a subsidiary of its flagship Adani Enterprises Ltd, has bought VCPL for Rs 113.75 crore. Until then, the loan has not been repaid. NDTV Ltd then said in a statement to stock exchanges that the CPL notice was served on them “without any discussion with NDTV or its founder-promoters”.
“Without any discussion with NDTV or its promoter founders, a notice was served on them by VCPL stating that it (VCPL) had exercised its rights to acquire 99.50% control of RRPR, the promoter-owned company which owns 29.18% of NDTV,” their statement said.