PC Jeweller clarifies on withdrawal of buyback offer
New Delhi: PC Jeweller today said it did not immediately disclose to stock exchanges the non-receipt of NOC from bankers for its proposed Rs 424 crore buyback as it needed to discuss the issue first with its board.
The company's stock price crashed sharply after it withdrew the buyback offer. It is down at Rs 83.85 on BSE, from a high of over Rs 600 apiece in January. Its one month high/low was Rs 145.35/Rs 65.35.
"The company had received from bank written intimation of its objection to the proposed buyback on July 7, 2018. However, the company was still hopeful of getting NOC and was engaging with the bank for the same. Hence not considered it material at that time and accordingly had not made any disclosure," PC Jeweller said in a clarification to BSE
After receiving the bank's letter dated July 12, 2018 re-affirming its denial for the consent to the proposed buyback, the company said, "instead of immediately disclosing the same to the stock exchanges, the company first wanted to discuss the matter at Board level and update the stock exchanges thereafter about the outcome of the board meeting".
The information becomes material only after the board decides to withdraw buyback, it said. Accordingly, the outcome of the meeting was intimated to the exchanges along with the reason for the same, and hence the company has complied with the requirement of the regulation, it added.
To a query by the stock exchanges as to whether the company evaluated and complied with the SEBI norms, if NOC from banks was a condition precedent, the company said: "We believe these resolutions are customary and were confirmed by the company's advisors as being adequate to cover all approvals, including regulatory and contractual (including those from its lenders).
"However, we have noted your observation and would try to be more specific on transactional resolutions in the future."