May 04, 2022

Fomento Resorts to Kick out at Throwaway Rate - Loyal Remainder Non Promoter Share Holders


Fomento Resorts  Delisted in 2020 at a Delisting / Floor  Price of Rs. Rs.141 /-


Its Promoters have initiated the process of Compulsory Buying back of remaining shareholders  , by way of NCLT mandated Selected Capital Reduction , by a postal ballot - voting from 02/05/2022 to 31/05/2022
 

Prospects of all Hotel companies have zoomed in the present Post Covid Boom.
Value of Hotel properties have also sky rocketed
 Share price has  been arbitrarily valued at Rs. 166 .
 5 years back it was Rs. 141.

  This is totally unacceptable . 
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If the Company feels that the rate it is offering is " FAIR " then it should , also , be willing to offer to sell its entire majority  holding at that rate . The minority share holders ( and other Indian share holders ) should have a Right of Pre emption at that " FAIR " rate. For example if Fomento Resorts  Limited feels that Rs166 is a " fair rate " then Indian shareholders in general should be given an opportunity to form a SPV ( Special Purpose Vehicle ) Company which ( with suitable debt equity Leveraged Buy out ) and buy  at the same rate  the majority shares from the Promoters. A period of 6 months should be kept for giving this opportunity to Non Promoter Indian shareholders

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The Valuers etc are all engaged by the Managements and cannot be considered as Unbiased or totally Fair. Affected shareholders should be allowed to have their own valuers / Valuation Reports. 

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Games Promoters Play ( on Minority Public Shareholders ).

Promoters use clever moves to forcibly eject Public shareholders when ever they feel like i.e. when the Company has excellent future prospects or when it suits the Promoters. 


1 ) Selective cancellation of Non Promoters shares.
2 ) Conversion of Equity shares in to Redeemable Preference Shares.
3 ) Consolidation of face value of one share to a Higher Denomination .

In all cases , valuers are appointed and Paid by the Company. Thus they are Promoters' Agents.
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If the Company feels that the rate it is offering is " FAIR " then it should , also , be willing to offer to sell its entire majority  holding at that rate .

 The minority share holders ( and other Indian share holders ) should have a Right of Pre emption at that " FAIR " rate. 

For example if FCI OEN Connectors Limited feels that Rs.767 is a " fair rate " then Indian shareholders in general should be given an opportunity to form a SPV ( Special Purpose Vehicle ) Company which ( with suitable debt equity Leveraged Buy out ) and buy  at the same rate  the majority shares from the Promoters. 

A period of 6 months should be kept for giving this opportunity to Non Promoter Indian shareholders


OLD POSTS
Jolly Board , which holds very valuable real estate assets in Kanjur Marg , Mumabi , is also following similar cheap tactic to oust loyal remainder small shareholders.

http://www.rareindianshares.info/2015/11/jolly-board-consolidates-face-value-to.html

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Suashish Diamonds does the same anti shareholders move :-

http://www.rareindianshares.info/2015/12/suashish-diamonds-to-kick-out-loyal.html

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Blog Disclaimer : Please Recheck  All Information . All information given in Good Faith. No Responsibility . 

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For further case studies  vis - a - vis small shareholders , please consider the following links :-



LINK


General Warning : Investment in Shares Can be Injurious to Your WEALTH

Disclosure : The Blog writer in his / family names has holdings in Fomento Resorts . So please make suitable " provisions " for any likely Over Optimism

NB :All information given in good faith. Please recheck every point before taking an investment decision.No responsibility with this blog / blog writer

 

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