Engineering major Larsen & Toubro (L&T) on Saturday said market regulator SEBI has denied permission for its ₹9,000-crore share buy-back offer. In a regulatory filing to stock exchanges, L&T said the Securities and Exchange Board of India (SEBI) had asked it not to proceed with the buy-back.
“Since the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back (assuming full acceptance) would be more than twice the paid-up capital and free reserves of the company based on consolidated financial statements,” the buyback offer is not in compliance with the Companies Act and SEBI norms, the regulator said in a letter to the company.
L&T had proposed to buy back up to 6.1 crore shares from shareholders at a price of ₹1,475 per equity share, aggregating to ₹9,000 crore. The offer was open to those holding equity shares as on October 15.
A buy-back reduces the number of shares available in the open market.
