Saint Gobain Sekurit India – To Be or Not To Be?

In this case, the delisting option is being investigated by Saint Gobain Sekurit India Limited (“ISMS”), a French-owned Indian company listed on BSE Limited (“BSE”). On June 4, 2010 and August 19, 2010, the central government of India passed legislative changes that raised the minimum share of publicly traded companies to 25%. Companies listed on an Indian stock exchange on June 4, 2010 were given until June 3, 2013 to increase their public ownership to 25%. The French promoters of ISMS, who owned 85.77% of the company, faced the difficult decision to dilute their own stake in the company to maintain the ISMS listing on the BSE (a legacy of the previous owners of the company ) or themselves voluntarily from BSE. At first glance, the continued listing on ISMS does not offer any appreciable advantage as they have rarely raised money from the public and their global profile does not benefit significantly from listing on an Indian stock exchange. Furthermore, its continuing listing meant that Saint Gobain would face dilution charges. On the other hand, delisting transactions could be costly primarily because the delisting price is determined through a reverse accounting process that exercises significant bargaining power with common shareholders. Furthermore, delisting transactions are known to be particularly unpredictable for foreign companies in India. The promoters of Saint Gobain had to make an informed decision whether to dilute (be) or delete (not be) the list.

We don‘t have the case solution, but we pay up to $50 for yours!

• Set a reminder to receive an email after your university‘s case study deadline.
• Upload your case study solution. We will review it for quality.
• Get your money via PayPal or to your bank account.