SECURITIES AND EXCHANGE COMMISSION
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SECURITIES AND EXCHANGE COMMISSION
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WASHINGTON. D.C. 20549
UNITED STATES
*'~'M7[xXly r
DIVISION OF
CORPORATION FINANCE
August 16, 2017
Response of the Office of Mergers and Acquisitions
Division of Corporation Finance
Steven V. Bernard
Bradley L. Finkelstein
Wilson Sonsini Goodrich &Rosati
650 Page Mill Road
Palo Alto, CA 94304
Re:
Partial Cash Issuer Tender Offer for Shares of Infosys Limited
Dear Messrs. Bernard and Finkelstein:
We are responding to your letter dated August 16, 2017, addressed to Ted Yu, Christina
Chalk, and Christina Thomas, as supplemented by telephone conversations with the staff and
your supporting letter from Indian counsel of the same date, with regard to your request for
exemptive relief. To avoid having to recite or suimnarize the facts set forth in your letter, we
include a copy of your letter with this response, as well as a copy of the accompanying letter
from Indian counsel, AZB &Partners. Unless otherwise noted, defined tet~ns in this response
letter have the same meaning as in your letter dated August 16, 2017.
On the basis of the representations and the facts presented in your letter, the Division of
Corporation Finance, acting for the Commission pursuant to delegated authority, by separate
order is granting exemptions from the following provisions:
• Exchange Act Rules 13e-4(~(1)(i) and 14e-1(a) to permit the Company to make
an Issuer Tender Offer that will be open for only 1~0 working days(which is
defined in your letter as a working day ofthe Securities and Exchange Board of
India), as mandated by Indian law;
Exchange Act Rule 13e-4(fl(8)(i) to permit the Company to make the Issuer
Tender Offer only to shareholders as of a record date established in accordance
with Indian law; and
Exchange Act Rule 13e-4(x(3) to permit the Company to comply with the
Entitlement system for proration mandated by Indian law if the Issuer Tender
Offer is oversubscribed. In this regard, we note your representation that Indian
law specifies the Entitlement that the Company must purchase from tendering
Steven V. Bernard
Bradley L. Finkelstein
Wilson, Sonsiiri, Goodrich &Rosati
August 16, 2017
Page 2
shareholders in an oversubscribed partial issuer tender offer and that this
Entitlement is based on the size of their individual shareholdings on the record
date established for the Issuer Tender Offer.
.The foregoing exemptive relief is based solely on the representations and the facts
presented in your letter dated August 16, 20]7 and does not represent a legal conclusion with
respect to the applicability of the statutory or regulatory provisions of the federal securities laws.
The relief is strictly limited to the application of the rules listed above to the Issuer Tender Offer.
The Company should discontinue the Issuer Tender Offer pending further consultations with the
staff if any of the facts or representations set forth in your letter change. In addition, this position
is subject to modification or revocation if at any tune the Commission or the Division of
Corporation Finance determines that such action is necessary or appropriate in furtherance of the
purposes of the Exchange Act.
We also direct your attention to the anti-fraud and anti-manipulation provisions of the
federal securities laws, including Sections 9(a), 10(b) and 14(e) of the Exchange Act and Rules
l Ob-5 and 14e-3 thereunder. Responsibility for compliance with these and any other applicable
provisions of the federal securities laws rests with the participants in the Issuer Tender Offer.
The Division of Corporation Finance expresses no view with respect to any other questions that
the Issuer Tender Offer inay raise, including, but not limited to, the adequacy of the disclosure
concerning, and the applicability of any other federal or state laws to, the Issuer Tender Offer.
Sincerely,
~—
~~
\ J
Ted Yu
Chief, Office of Mergers and Acquisitions
Division of Corporation Finance
UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION
August 16, 2017
In the Matter ofInfosys Limited
ORDER GRANTING EXEMPTIONS FROM
EXCHANGE ACT RULES 13E-4(F)(1)(I),
13E-4(F)(3), 13E-4(F)(8)(I) AND 14E-1(A)
Infosys Limited submitted a letter dated August 16, 2017 requesting that the Securities and
Exchange Commission ("Commission") grant exemptions from Exchange Act Rules 13e-4(fl(1)(i),
13e-4(fl(3), 13e-4(fl(8)(i) and 14e-1(a)for the transaction described in its letter ("Request").
Based on the representations and the facts presented in the Request, and subject to the terms
end conditions described in the letter from the Division of Corporation Finance dated August 16,
2017,it is ORDERED that the request for exemptions from Exchange Act Rules 13e-4(~(1)(i), 13e4(fl(3), 13e-4(fl(8)(i) and 14e-1(a) is hereby granted.
For the Commission, by the Division of Corporation Finance, pursuant to delegated
authority.
Brent J. Fields
Secretary
Action as set forth or recommended herein APPROVED
pursuant to authority delegated by the Commission under
Public Law 87-592.
For: Division of Corporation Finance
Date:
y ~L
~
~~r~ Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
G50 Page Ivfill Road
P:tlo tUto,CA 9h304-1050
rrto~r• 650.493.9300
r•,~~ 650.493.6811
www.asgr.com
August 16, 2017
VIA EMAIL
Securities and Exchange Commission
Division of Corporation Finance
100 F Street N.E.
Washington, D.C. 20549-1090
Attention:
Re:
Ted Yu, Chief, Office of Mergers and Acquisitions
Christina E. Chalk, Senior Special Counsel, Office of Mergers and Acquisitions
Christina M. Thomas, Attorney-Adviser, Office of Mergers and Acquisitions
Partial Cash Tssuex Tender Offer fox Shares of Infosys Limited
Ladies and Gentlemen:
We are writzng on behalf ofInfosys Linnited, a public limited company incorporated
under the laws of India (the "Company"), to request that the staff of the Division of Corporation
Finance (the "Staff')ofthe Securities and Exchange Commission (the "Commission") grant
exemptive relief with respect to Rule 13e-4("Rule 13e-4") and Rule 14e-1 ("Rule 14e-1") under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")to permit the Company
to proceed with its proposed partial tender offer for cash (the "issuer Tender Offer") in
compliance with applicable laws of Tndia, including the Indian Companies Act, 2013 and
Securities and Exchange Board of India(Buy Back of Securities) Regulations, 1998 (the
"Buyback Regulations"), that conflict with Rule 13e-4 and Rule 14e=1. The Issuer Tender
Offer concerns the proposed repurchase by the Company of a small portion(up to approximately
6.0%1)of its fully paid outstanding equity shares (the "Shares") anal will not result in a change
of control of the Company. The Issuer Tender Offer will be structured to comply in all material
respects with the Exchange Act and the regulations thereunder, except for the exemptive relief
requested herein.
AZB &Partners is advising the Company and in relation to this request for exennptive
relief as to Indian legal matters and Wilson Sonsini Goodrich &Rosati, Professional Corporation
is advising the Company and in relation to this request for exemptive relief as to U.S. legal
matters. The Company has retained two merchant bankers for~the Issuer Tender Offer.
'The final amount will be determined by the Company's board of directors, but we have been advised that it is not
currently expected to exceed 6%.
Wilson Sonsini Goodrich &Rosati
PRO~LSSIONAL CORPORATION
Division of Corporation Finance
August 16,2017
Page 2
The following summarizes the rules under the Exchange Act as to which we are
respectfully requesting exemptive relief on behalf ofthe Company and the related applicable
Indian requirements:
Minimum Period. Rule 13e-4(~(1)(i) and Rule 14e-1(a) under the Exchange Act
provide that a tender offer must remain open for a minimum oftwenty business
days,2 whereas the Buyback Regulations require that an Issuer Tender Offer
remain open for a fixed period of 10 working days. On behalf ofthe Company,
we respectfully request that the Staff grant exemptive relief with respect to Rule
13e-4(fl(1)(i) and Rule 14e-1(a)to permit the Issuer Tender Offer to be held open
for a period of 10 working days in accordance with applicable Indian laws and
regulations.
Record Date. Rule 13e-4(fl(8)(i) under the Exchange Act provides that a tender offer
must be open to all security holders ofthe class ofsecurities subject to the tender
offer during the period such offer remains open. This "all-holders" rule prohibits
discriminatory treatment of security holders belonging to the same class ofsecurities.
In contrast, tlae Buyback Regulations provide that-the issuer must fix a specific
"record date" fox the Buyback, and that only shareholders as ofthe record date are
eligible to participate in the Buyback. Fixing a record date is necessary to enable the
issuer and its stock transfer agent to determine each shareholder's "entitlement" as
described below. The record date requirement under the Buyback Regulations is
inconsistent with the plain reading ofRule 13e-4(fl(8)(i). On behalf ofthe Company,
we respectfully request that the Staff grant exemptive relief with respect to Rule 13e4(fl(8)(i) to permit the.Issuer Tender Offer to be offered to only shareholders as of
the record date in accordance with applicable Indian laws and regulations.
Allocation/Proration. Rule 13e-4(fl(3) under the Exchange Act requires that if a
tender offer by the issuer is for fewer than all ofthe outstanding equity securities
of a class, and ifthe number of securities tendered exceeds the number that the
issuer is bound or willing to take up and pay for, the issuer must accept and pay for
the securities as nearly as may be pro rata, disregarding fractions, according to the
number ofsecurities tendered by each security holder during the period that the
z Any reference herein to "business days" has the meaning set forth in Exchange Act Rule 13e-4(a)(3) and any
reference to "working days" means a working day of the Securities and Exchange Board of India.
8526462 26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 3
offer remains open. In contrast, we are advised that the Buyback Regulations
provide that the issuer and its stock transfer agent shall compute the percentage of
shares that the Company is required to accept if tendered (the "Entitlement")
from each shareholder based on the number of shares held by such shareholder on
the record date. In addition, we are advised that under the Buyback Regulations,
15% ofthe number of shares which the Company proposes to buy back or the
number ofshares entitled as per their shareholdir:g, whichever is higher; must be
reserved for "sma11 shareholders"(defined as shareholders who, as ofthe record
date, hold shares having a market value(on the basis of the closing price ofshaxes
on the stock exchange that has highest trading volume in respect ofsuch security)
of not more than TNR 200,000, which is equivalent to approximately US$3,000)
("Small Shareholders"), and thus the Entitlement fox Small Shareholders is
usually greater, on a percentage basis, than the Entitlement for other shareholders
("General Shareholders"). The system of Entitlements under the Buyback
Regulations is contrary to the plain reading ofthe pro rata allocation mandated
under Rule 13e-4(x(3). On behalf of the Company, we respectfully request that
the Staff grant exemptive relief with respect to Rule 13e-4(x(3) to permit the
Issuer Tender Offer to be allocated in accordance with applicable Indian laws and
regulations.
The remainder of this letter consists of:(i) background concerning the Company;(ii) a
description ofthe Issuer Tender Offer and related Indian law requirements; (iii) a discussion of
the exemptive relief requested; and (iv) a conclusion.
I.
Background
Headquartered in Bengaluru, India, the Company provides information technology
("YT"), business consulting and outsowrcing services to companies around the world. The
Company is one of the largest IT companies in India.
The Shares are listed and traded in India on the National Stock Exchange of India
Lirrzzted ("NSE")and the BSE Limited ("BSE")(collectively the "Indian Stock Exchanges").
The Company is a "foreign private issuer" as defined in Rule 3b-4(c) under the Exchange Act
annual
and is subject to the informational reporting requirements of the Exchange Act and files
reports on Form 20-F and furnishes reports on Form 6-K with the Commission. The Company's
the
American Depositary Shares (the "ADSs"), each representing one Share, are issued by
The
y").
"Depositar
(the
.Americas
Company
Company's depositary, Deutsche Bank Trust
and on the
ADSs are listed and traded on the New York Stock Exchange (the "NYSE")
Euronext London and Paris.
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 4
Prior to making investments in India, every foreign institutional investor("FI Investor")
and foreign portfolio investor("FP Investor"}3 is required to register itself with the Securities
and Exchange Board ofIndia("SEBI")and obtain a SEBI registration number. The application
form prescribed by SEBI for registration of FI Investors and FP Investors requires them to
specify theix country ofresidence, incorporation, establishment ox formation. The Company
submits that the SEBI registration number includes a code indicating the FI Investor's or FP
Investor's country of residence, incozporation, establishment or formation, which is publicly
available. Further, depositaries and.custodians in India appointed by FI Investors and FP
Investors would also record the said SEBI registration code for the foregoing in their systems.
Under Regulation 31 ofthe Securities and Exchange Board ofIndia (Listing Obligations and
Disclosure Requirements)Regulations, 2015 (the"LODR Regulations"), the Company is
required to submit a breakdown ofits shareholders.by category, including the percentage of
shares held by FI Investors and FP Investors, to the Indian Stock Exchanges on a quarterly basis.
This information is publicly disclosed on the websites ofthe Indian Stock Exchanges and is
compiled by the Company's registrar and transfer agent, Karvy Computershare Private Limited
(the "Transfer Agent"), on the basis of beneficial shareholding positions provided by the
depositories (National Securities Depository Limited("NSDL")and Central Depository Services
(India) Limited ("CDSL")).
The Company has determined that U.S. holders do not hold more than 40% ofthe Shares
that are the subject ofthe Issuer Tender Offer, as determined pursuant to Instruction 2 or 3 to
paragraphs (h)(8) and (i) of Rule 13e-4. To ascertain the holders of Shares resident in the United
States as provided under the Exchange Act Rule 1283-2(a) and Exchange Act Rule 12g5-1, the
Connpany has made inquiries (as explained below) with the Transfer Agent and depositories
(NSDL and CDSL)to determine the number of Shares beneficially hEld by beneficial holders of
Shares resident in the United States(the "Beneficial Ownership Analysis"). The Transfer Agent
has provided the Company with details ofthe beneficial shareholders, including the number of
Shares held by beneficial shareholders resident in India and the identities and number of Shares
held by each ofthe beneficial shareholders designated as FI Investors or FP Investors or other
non-resident investors. The Company has also independently checked the details ofthe
beneficial shareholders from the SEBI website. The Company has reviewed the country of
3"Foreign institutional investors" and "foreign portfolio investors" are institutional investors registered with SEBI
that are permitted to invest in specified securities in Indian under a portfolio investment route as opposed to a
foreign direct inveshnent route. Foreign direct investment in an Indian company generally involves along-term
investment whereby the investor typically participates in the affairs ofthe company to some extent. Conversely,
portfolio investments are~more temporary investments that are not intended to result in an investor acquiring control,
or otherwise participating in the affairs, of an Indian company.
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
P ROFHSSIONAI. CORPORATION
Division of Corporation Finance
August 16, 2017
Page 5
residence indicated in the relevant FI Investor's ox FP Investor's registration number with S~BI
to determine the number of outstanding Shares4 beneficially owned by U.S. holders. In addition,
the Depositary has provided the Company with details of ADSs held by U.S. holders. Based on
the foregoing, the Company believes that approximately 21.8% ofthe Company's total
outstanding Shares(9.9% of the Shares represented by ADSs as of July 26,2017 and 11.9% of
the Shares as of July 21, 2017) are beneficially owned by U.S. holders, while non-U.S. holders
hold approximately 72.5% ofthe Company's total outstanding Shares (approximately 2.9% of
the Shares represented by ADSs as of July 26,2017 and 69.8% ofthe Shares as of July 21, 2017).
The remaining 5.7% ofthe outstanding Shares are held by Indian citizens who are not resident in
India, ADS holders and a category of retail and other investors, in each case for which the
Company cannot determine who is a U.S. holders Accordingly, the Company believes that the
Issuer Tender Offer is eligible for the "Tier II" exemption under Rule 13e-4 of the Exchange
Act.
II.
Description of the Issuer Tender Offer
A. Issuer Tender Offer Mechanics for Equity Shareholders,including Equity
Shareholders in the United States —Shareholder Approval and Record Date.
In accordance with the Buyback Regulations and applicable Indian law, all holders of the
Shares, including those in the United States, will be provided with informationabout the Issuer
Tender Offer via a postal ballot seeking shareholder approval of the Issuer Tender Offer and a
letter of offer.
The Issuer Tender Offer xequires approval by the Company's board of directors("Board
Approval")and approval by the shareholders ofthe Company("Shareholder Approval").
Board Approval ofthe Issuer Tender Offer will be made publicly available on the websites of the
Indian Stock Exchanges and will also be filed with the Commission as preliminary issuer tender
offer materials on Schedule TO-C.
4 As of June 30, 2017, a total of 2,296,944,664 Shares were outstanding.
5 3.9%are held by ADS holders for whom beneficial ownership information is not available from the Depositary,
and the remaining 1.8%are held by Indian citizens and other investors for whom residency information is not
available.
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 6
The Company will seek Shareholder Approval via a postal ballot6 disseminated via mail
andlor email to all holders ofthe Shares, including the holders ofthe Shares in the United States,
approximately 30 to 35 days prior to the date ofthe Shareholder Approval. The postal ballot will
also be provided to the Depositary (in its capacity as the registered holder ofthe Shares
underlying the ADSs)approximately 30 to'35 days prior to the date ofthe Shareholder Appzoval,
who will be instructed to mail the postal ballot to registered holders of ADSs. The Company will
also request that the Depositary make arr~:ngements with Broadridge Financial Solutions, Tnc.
and Proxy Services Corp., as mailing agents(the "Mailing Agents")fox the participants within
The Depository Trust Company("DTC"). The Mailing Agents will be instructed to mail the
postal ballot to beneficial holders of ADSs who hold through DTC in "street name". We have
been advised that mailing by the Depositary and the Mailing Agents typically occurs within three
to seven business days after the date the Mailing Agents receive the materials to be distributed.
The postal ballot will specify that ADS holders will be eligible to participate in the Issuer
Tender OfFer by submitting their ADSs to the Depositary for cancellation and withdrawing the
underlying Shares prior to the Record Date (defined below)so that they are holders ofShares on
the Transfer Agent's books as ofthe Record Date. The postal ballot will include instructions on
the procedure for tendering Shares; including Shares issued upon cancellation of ADSs,once the
tender offex i~ formally commenced. The postal ballot will also include instructions on the
procedure for submitting ADSs to the Depositary for cancellation and withdrawing the underlying
Shares and for re-depositing any such Shares that are not accepted in the Issuer Tender Offer
back into the depositary facility. The postal ballot will set forth the maximum number of Shares
proposed to be bought back and the maximum price at which Shares are proposed to be bought
back. ~ addition, because the Issuer Tender OfFer will be only open to shareholders who hold
Shares as of a specified record date ("Eligible Shareholders"), including Eligible Shareholders
in the United States, the postal ballot will'include the approximate expected record date for
determining Eligible Shareholders. The postal ballot will be filed with the Commission on
Schedule TO-C and furnished to the Commission on Form 6-K.
° A postal ballot enables shareholders of an Indian company to vote by mail or electronic means in lieu of
transacting business at a general meeting. The postal ballot process entails the company sending a notice to all of its
shareholders along with the draft resolution(s), explaining the reasons for the same and requesting them to vote in
favor or against the resolution(s). If a resolution is approved by the requisite majority ofthe shareholders by means
of postal ballot, it is deemed to have been du]y passed at a general meeting.
~ Prior to withdrawing Shares underlying their ADSs, ADS holders will need to obtain an income tax number,
referred to as a "Permanent Account Number"(a "PAN"),set up an account with a bank or broker in India to hold
the Shares in electronic dematerialized form and set up a broker account in India to effect transactions in the Shares.
This process, including the potential time period required to implement it, will be described in the postal ballot.
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 7
The Company expects the Shareholder Approval process will take approximately 30 to
35 days from the date the postal ballots are disseminated to holders of Shares. When obtained,
the Shareholder Approval ofthe Issuer Tender Offer will be made publicly available on the
websites of the Indian Stock Exchanges and will also be filed with the Commission as
preliminary issuer tender offer materials on Schedule TO-C and furnished to the Commission on
Form 6-K.
Upon receipt of Shareholder Approval, the Company will finalize the record date (the
"Record Date")for the purpose of determining Eligible Shareholders and £or determining the
respective Entitlements of General Shareholders and Small Shareholders. A notice ofthe Record
Date will then be sent to the Indian Stock Exchanges at least seven working days (excluding.the
date ofthe notice and the Record Date)prior to the Record Date. The notice ofthe Record Date
will be made publicly available on the websites of the Indian Stock Exchanges and filed with the
Commission on Schedule TO-C and furnished to the Commission on Form 6-K.
Within two working days of receiving Shareholder Approval,the Company must publish
a public announcement("Initial Public Announcement') which will confirm the price per
Share ofthe Issuer Tender OfFer and the maximum number of Shares sought in the Issuer Tender
Offer.
ADS holders will receive advance notice ofthe expected Record Date via the postal ballot.
The postal ballot will be made available on the Commission's EDGAR database approximately
30 fio 35 days prior to the Shareholder Approval date. Physical copies ofthe postal ballot wi11 be
mailed to registered holders of ADSs and beneficial holders of ADSs who hold through DTC in
"street name" approximately 23 to 26 days prior to the Shareholder Approval date. After the
Shareholder Approval date, there is a minimum of seven working days (approximately nine
calendar days) prior to the Record Date. Notice ofthe actual price per Share ofthe Issuer Tender
Offer will be published within two working days after the Shareholder Approval date in the
Initial Public Announcement. As a result, ADS holders who wish to be able to participate in the
Issuer Tender Offer will have a nninimum of approximately 39 to 44 days from the availability of
the postal ballot on the Commission's EDGAR database to become eligible to participate by
withdrawing Shares underlying their ADSs fronn the depositary facility prior to the Record Date
so that they will be holders of Shares on the Record Date. Such ADS holders will have notice of
the price per Share ofthe Issuer Tender Offer at least five working days prior to the Record Date.
We have been advised that the process of establishing a custodial account in India where ADS
holders can take delivery ofthe Shares underlying their ADSs(including obtaining a PAN and
completing "know your customer" documentation) typically takes 21 to 35 days but ultimately
depends on various factors, including the time to complete the requisite documents, verification
ofthe documentation and governmental agency response time. We have been further advised by
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 8
the Depositary that ADS holders who have established a custodial account in India where they
can take delivery ofthe Shares underlying their ADSs typically become a holder ofsuch Shares
within two to three business days oftheir request to withdraw such Shares from the depositary
facility.
B. Issuer Tender Offer Mechanics for Equity Shareholders,including Equity
Shareholders in tre United States —Public Announcements and Tendering
Period.
As noted above, within two working days ofreceiving Shareholder Approval,the
Company must publish the Initial Public Announcement. The Initial Public Announcement will
include the actual price per Share ofthe Issuer Tender Offer and the maximum number of Shares
sought in the Issuer Tender Offer. The Company will publish the Initial Public Announcement
in Indian newspapers and in a U.S. newspaper with national circulation. The Ixutial Public
Announcement will also be made publicly available on the websites ofSEBI and the Indian
Stock Exchanges and filed with the Commission on Schedule TO-C and furnished to the
Commission on Form 6-K.
The Company is required to submit a draft letter of offer (~°Letter of Offer")to SEBI
within five working days ofthe Initial Public.Announcement. The draft Letter ofOffer
submitted to SEBI will be made publicly available on the website of SEBI and filed with the
Commission on Schedule TO-C and famished to the Commission on Form 6-K.
SEBT may give its comments on the draft Letter of Offer not later than seven working
days ofthe receipt ofthe draft Letter of Offer. If SEBI seeks additional clarifications or
information from the Company on the draft Letter of Offer, the period within which SEBI is
required to provide its comments will be extended by a period ofseven working days from the
receipt of a satisfactory reply to the clarification or additional information sought. We are
advised that it generally takes approximately seven working days for SEBI to provide its
comments, excluding the time spent in responding to its queries.
Within five working days ofreceipt ofSEBI's final comments,a final Letter of Offer
must be disseminated to Eligible Shareholders. The final Letter of Offer will be made publicly
available on the website of SEBI. The date of opening ofthe Issuer Tender Offer.is required
under the Buyback Regulations to be within five working days ofthe date of dispatch of Letter
of Offer by the Company. On the day ofthe opening offihe Issuer Tender Offer, the Company
will ale a Schedule TO-I containing the information required therein (inclusive ofthe final Letter
of Offer), and disseminate the Issuer Tender Offer by summary publication. In addition, the
Letter of Offer will be sent to shareholders who have registered their email addresses for receipt
8526462_2G.doc
Wilson Sonsini Goodrich &Rosati
PROFf:SS10NAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 9
ories, For
of documents in electronic form to their email addresses registered with the deposit
of Offer will
shareholders whose email addresses are not registered, physical copies of the Letter
k
be sent by postal mailing by registered post, speed post or courier. Under the Buybac
g days
workin
of
10
fixed
period
a
for
open
Regulations, the Issuer Tender Offer must rerr~ain
h of the
the
dispatc
n
betwee
following commencement(the "Tendering Period"). Accordingly,
a
Offer,
final Letter of Offer to the holders ofthe Shares and the closing of the Issuer Tender
period of 14 working days (or approximately 18 calendar days) will elapse.
pate in the
During the Tendering Period, all Eligible Shareholders who wish to partici
using the separate
Issuer Tender Offer must tender their Shares through Their stock broker
ges. A shareholder
Exchan
Stock
Indian
the
acquisition window that is created on one or both of
A shareholder may
ment.
may tender less than, equal to or greater than such shareholder's Entitle
withdraw tendered Shares during the Tendering Period.$
Company will
Upon closing ofthe Issuer Tender Offer, the Transfer Agent and the
tendered Shares.
finalize the allocation to each Eligible Shareholder who validly
are Small
All Eligible Shareholders, regardless of whether such shareholders
ive Entitlement will have
Shareholders or General Shareholders, who tender up to their respect
Shareholders as a group or by the
their Shares accepted.9 Tf there is an under-tender by the Small
back pro rata among
General Shareholders as a group, additional Shares will be bought
their respective Entitlement.
than
more
ed
shareholders in the under-tendering group who tender
back pro rata among a
Thereafter, any remaining Shares to be bought back will be bought
who tendered more than their
connbined pool of Small Shareholders and General Shareholders
Entitlement.
applied and payment for the
The Company expects that the proration calculations will be
ter, and within seven working
accepted Shares will be made as promptly as practicable thereaf
ance with the Buyback Regulations. The
days ofthe closing ofthe Issuer Tender Offer, in accord
the stock exchange settlement
Company will accept tendered Shares via its broker on
the clearing corporation will transfer
mechanism. Once the basis of acceptance is finalized,
had to be tendered directly into a special share escrow
$ Prior to July 2015, shares in India~i self-tender offers
. However, since July 2015,the Buyback Regulations
buyback
the
of
registrar
account managed by the manager or
placing a sell order through their own broker akin to an open
require Eligible Shareholders to tender the Shares by
and to provide better tax treatment in Tndia for shareholders.
market transaction in order to streamline the process
so few Shares such that their Entitlement is less than one
hold
who
9 In certain circumstances, Small Shareholders
in the Issuer Tender Offer.
Share may be entitled to have one Share accepted
8526462_2G.doc
Wilson Sonsini Goodrich &Rosati
PROFESS70NAL CORPORATION
Division ofCorporation Finance
August 16,2017
Page 10
unaccepted Shares directly.to the shareholders accounts. The Company will transfer the funds
(inclusive oftaxes,transaction charges and brokerage fees)pertaining to the offer to the clearing
corporation's bank account. The clearing corporation will then settle the trades by making direct
funds payouts to Indian shareholders, who will in turn pay brokerage fees,taxes and transaction
charges separately'to their brokers. In case ofnon-resident shareholders(including U.S.
shareholders),.the clearing corporation will remitfunds to the respective non-resident
shareholders' brorers/custodians, who will in turn deduct transaction charges and brokerage
fees and withhold taxes before remitting the net proceeds to such non-resident shareholders.
The Company must publish apost-offer public announcement("Final Public
Announcement")within two days ofcompletion ofthe Issuer Tender Offer in the same Indian
newspapers as the Initial Public Announcement. The Fix►al Public Announcement will be made
publicly available on the websites ofSEBI and the Indian Stock Exchanges and filed with the
Commission on a Schedule TO-I amendment and furnished to the Commission on Form 6-K.
The Final Public Announcement will disclose,among other things,(i)the number ofShares
tendered;(ii)the numbez ofShares accepted and repurchased;(iii)the price at which the Shares
were repurchased;(iv)the total amount invested by the Company in the Issuer Tender Offer; and
(v)the consequent changes in the capital structure'ofthe Company resulting from the Issuer
Tender Offer.
The nnerchant banks must file a report to SEBT which includes the details ofthe actual
tendering in the Issuer Tender Offer within fifteen days from the date ofclosing ofthe Issuer
Tender Offer.
All purchases pursuant to the Issuer Tender Offer will be paid for in Indian Rupees,
including purchases from holders ofShares who are resident outside India,in accordance with
applicable law.The Buyback Regulations require that paymentfor tendered Shares be made
within seven working days ofthe expiration ofthe Issuer Tender Offer.10 The Shares validly
tendered and purchased by the Company will be extinguished within seven days ofthe expiration
ofthe Issuer Tender Offer.
)(iv),
10 The Company believes that, pursuant to the exemption granted by Exchange Act Rule 13e-4(h)(9)(i)(1
13e-4(fl(5)
Rule
Act
ofExchange
irements
payment'requ
payment within this time period will satisfy the "prompt
or decrease the
and Rule ]4e-1(c). As the Company undertakes not to change the offer price per Share ox to increase
Company is not
ofOffer,the
Letter
the
in
out
set
is
what
from
repurchase
for
sought
being
Shares
the
percentage of
seeking exemptive relieffrom Exchange Act Rule 13e-4(x(5) and Rule 14-1(c).
8S2G4G2_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 1]
C. ADS Holder Participation in the Issuer Tender Offer.
A holder of ADSs may participate in the Issuer Tender Offer by delivering his or her
ADSs to the Depositary for cancellation and directing the Depositary to cause the Shares
underlying s=ach ADSs to be withdrawn and delivered to such holder prior to the Record Date.
As a holder of Shares on the Transfer Agent's books on the Record Date, he or she can then
tender those Shares in accordance with the process outlined above for the Issuer Tender Offer.
•ADS holders who withdraw Shazes from the depositary facility will be able to re-deposit such
Shares (including any Shares not accepted in the Issuer Tender Offer) into the depositary
facilityl l provided that they instruct their broker in India to deliver such Shares back to the
Depositary's custodial account within 30 days after expiration of the Tendering Period. The
Depositary has agreed to waive the ADS cancellation and issuance fee that would otherwise be
payable in connection with the foregoing transactions.12
We note that in certain prior tender offers for the shares ofIndia companies (e.g. the offer
by Panatone Finvest Ltd. anal certain entities associated with the Tata Group for shares of Videsh
Sanchar Nigam Ltd. and the offer by Tech Mahindra Limited and Venturebay Consultants
Private Limited for shares of Satyam Connputer Services Limited)for which exennptive relief
was sought and granted by the Commission, an escrow account or similar tender facility (an
"ADS Tender Facility") was utilized to facilitate tenders by ADS holders ofthe equity- shares
underlying their ADSs. Such tender offers differ from the Issuer Tender Offer in that they were
third-party #ender offers (as opposed to issuer tender offers) and, as such, do not require a recoxd
date or an entitlement.
"The Reserve Bank of India had issued the Depository Receipts Scheme, 2014 effective from December 15, 20]4
("2014 Scheme"), which replaced The Issue of Foreign Currency Convertible Bonds and Ordinary Shares(Through
to
Depository Receipt Mechanism)Scheme 1993. The 2014 Scheme permits depository receipts to be converted
the
to
relation
in
SEBT
that,
by
advised
been
has
Company
underlying permissible securities and vice versa. The
particular Issuer Tender Offer contemplated by this exemptive reliefrequest letter, the 2014 Scheme is presently
operational and that the conversion of ADSs into Shazes and vice versa is available.
maximum
12 We have been advised that the number of ADSs outstanding at any time must not exceed a specified
the
as
maximum
specified
the
and
outstanding
ADSs
of
number
the
(we refer to the difference between
"Headroom"). For all ADSs submitted for cancellation on or after the date set by the Depositary for determining
Uate")through the final
ADS holders entitled to receive the postal ballot materials(the "AD3Postal Ballot Record
for the Shares
Headroom
sufficient
there
iemains
that
ensure
will
day ofthe Tendering Period, the Depositary
that the
provided
facility,
depositary
the
in
re-deposited
be
to
be
able
to
cancellation
such
to
withdrawn pursuant
for
Shares
Withdrawn
Period.
requisite instructions are given within 30 days after expiration ofthe Tendering
Posta!
ADS
the
to
prior
withdrawn
Shares
well
as
as
period,
which such instruction is not given within the specified
Headroom.
available
is
there
extent
the
to
re-deposited
be
may
Period,
Tendering
Ballot Record Date or after the
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 12
The Company has been advised by the Depositary that it is not possible for the
Depositary to determine the identities and holdings ofthe beneficial holders of ADS as of a
particular date in light ofthe fact that a very large percentage ofthe ADSs are held in "street
natrre" position through DTC,some of which are held by "objecting beneficial owners" who
have instructed their brokers not to share their information with the Connpany. Given this
inability, it is not possible to identify the ADS holders as ofthe Record Date who would be
eligible to participate in the Issuer Tender OfFer or their entitlement under the Buyback
Regulations. Thus, we are advised that the.principies ofrecord •date and entitlement introduced
in the Buyback Regulations by an amendment in 2012 conflict with the processes that could be
implemented by a depositary in an American Depositary Receipt facility. As a result, the
Company does not intend to utilize an ADS Tender Facilzty in connection with the Issuer Tender
Offer.
III.
Discussion of Exemptive Relief Requested
On behalf ofthe Company, we respectfully request that the Staff grant exemptive
reliefto the Company from the rules under the Exchange Act discussed below to enable the
Issuer Tender Offer to proceed. Due to the conflicts between the Exchange Act rules
discussed below and the regulations under Indian laws,the Issuer Tender Offer cannot be
implemented without the requested exemptive relief.
For the reasons discussed below,the Company believes the exexnptive relief
requested is appropriate and that it is in the interest of the shareholders and holders of ADSs
to enable the Issuer Tender Offer to proceed. Not only would exexnptive relief reflect comity
between the Commission and SEBI, but it will also enable ADS holders and holders of
Shares in the United States to participate in the Issuer Tender Offer.
If exemptive relief is granted under Rule 13e-4 and Rule 14e-1, the Issuer Tender
Offer will comply in all material respects with all Exchange Act requirements applicable to a
tender offer eligible under the Tier II exemption by an: issuer with a class of securities
registered pursuant to Section 12 ofthe'Exchange Act.
A.
Minimum Period.
Rule 13e-4(x(1) and Rule 14e-1(a) provide that a tender offer must remain open for a
minimum of20 business days.13 By contrast, Regulation 9(4) ofthe Buyback Regulations
~~ See foofiote 1, supra.
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 13
requires that an Issuer Tender Offer shall remain open for a fixed period of 10 working days.
Moreover, Regulation 9(4)ofthe Buyback Regulations does not allow any reduction or
increase ofthe fixed 10 working days period.
With effect from February 7, 2012, the Buyback Regulations were amended to reduce
the issuer tender offer period from 15 to 30 days to a fixed period of 10 working days.14 The
annual report issued by SEBI dated June 26,201215 and the agenda released by SEBI in
relation to its board meeting on January 3,2012,16 at which meeting this amendment was
considered by SEBI, noted that the rationale for amending the buyback offer process,
including the reduction ofthe tender period, was to enhance the efficiency of the process and
reduce the timelines involved.
The Staff has previously issued exemptive relief and no-action letters relating to the
nninimum tender period in the case ofsix Indian tender offers: Mphasis Limited(available April
7,2017 and June 28,2016),Just Dial Limited(available January 29,2017),Sun Pharmaceutical
Industries, Ltd. (available July 19, 2016),Patni Computer Systems Limited (available February 9,
2011), and Satyam Computer Services Limited(available Apri128, 20Q9). The Mphasis Limited
letter dated April 7,2017,the Just Dial Limited letter, and the Sun Pharmaceutical Industries,
Ltd. letter all involved issuer tender offers for equity shares and included a request for exemptive
relief with respect to Rule 14e-1(a)to comply With the Buyback Regulations that are also the
subject ofthe request under this letter. The Mphasis Limited letter dated June 28,2016 involved
a request for exennptive relief with respect to Rule 14e-1(a)in respect ofa partial cash tender
offer for the equity shares of Mphasis Limited to comply with the 2011 Takeover Regulations ,
(defined below) which stipulate a fixed tender offer period of 10 working days. The Satyam
Computer Services Limited and Patni Computer Systems Limited letters involved a fixed 20
calendar day bid period in a mandatory cash tender offer for the shares of an Indian company
under the applicable Indian law at the time,the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997(the "1997 Takeover
Regulations"). The 1997 Takeover Regulations have been repealed and replaced by the
Securities and Exchange Board ofIndia (Substantial Acquisition of Shares and Takeovers)
Regulationis, 2011 (the "2011 Takeover Regulations"). The 2011 Takeover Regulations
stipulate a fixed tender offer period of 10 working days, which has been reduced fronn the fixed
20 calendar day bid period stipulated under the 1997 Takeover Regulations. While the nature of
14 The amendment was pursuant to the Securities and Exchange Board ofIndia(Buy-back of Securities)
(Amendment) Regulations, 2012 which came into effect from February 7,2012(the "2012 Amendment').
15 Available at htto://www.sebi.gov.in/cros/sebi data/attachdocs/1347Q01327489.pdf.
16 Available at http://www.sebi.gov.in/cros/sebi data/boardmeeting/1326176942575-a.pdf.
8526~}62_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16,2017
Page 14
the transactions they govern is different, both the Buyback Regulations and the 2011 Takeover
Regulations stipulate a fixed tender offer period of 10 working days.
Further, we are advised that under Indian law in accordance with Section 68(5}(a) ofthe
Companies Act,2013 read with Regulation 4(1)(a) ofthe Buyback Regulations and Regulation
4(2)(c)(i) ofthe LODR Regulations, the Issuer Tender Offer has to be made to atl shareholders
ofthe Company (as ofthe record date set by the Company)and has to be made on equal terms.
In light ofthe discussion above, U.S. holders ofthe Shares cannot be excluded from the
Issuer Tender Offex or be offexed different terms from those offered to non-U.S. holders,
including with respect to the fixed period of 10 working days for which the Issuer Tender Offer
must remain open under the Buyback Regulations.
As the Buyback Regulations require the Company to provide all holders of Shazes with
the opportunity to participate in the Issuex Tender Offer on equal terms, the Company intends to
structure the Issuer Tender Offer as a single worldwide tender offer, including the United States.
In accordance with the Buyback Regulations and applicable Indian law,the Company
will seek the requisite shareholder approval of the Issuer Tender Offer through a postal ballot.
The postal ballot notice will be disseminated to the holders of Shares, including holders of
Shares in United States, whose names appear on the register ofinembers /list of beneficial
owners as received from the depositories~(NSDL and CDSL)as of a specified date to be
determined following Board Approval. The postal ballot notice will be sent to shareholders who
have registered their email addresses for receipt of documents in electronic form to their email
addresses registered with the depositories. For shareholders whose email addresses are not
registered, physical copies ofthe postal ballot notice will be sent by registered post, speed post or
a courier along with apostage-prepaid self-addressed business reply envelope. The postal ballot
will also be provided to the Depositary, who will be instructed to mail the postal ballot to
registered holders of ADSs. The Mailing Agents will be instructed to mail the postal ballot to
beneficial holders of ADSs who hold through DTC in "street name". We have been advised that
mailing by the Depositary and the Mailing Agents typically occurs within three to seven business
days after the date the Mailing Agents receive the materials to be distributed. A newspaper
advertisement inter alia specifying that the Company has dispatched the ballot papers and the
date ofconnmencennent and date of end of voting will be published in India and in a U.S.
newspaper with national circulation, being the Wall Street.Iournal, the New York Times or the
Washington Post.
The postal ballot will include information concerning the Issuer anal Issuer Tender Offer,
including (i) the resolutions requiring shareholder approval;(ii) the means by which sha~•eholders
857.6462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 15
can vote;(iii) the rationale underlying, and method for executing, the Issuer Tender Offer;(iv)
the maximum price per Share of the Issuer Tender Offer•,(v)the maxinnum number of Shares to
be sought in the Issuer Tender Offer;(vi) the approximate expected record date for determining
Eligible Shareholders;(vii) the percentage of the outstanding Shares owned by the Company's
directors, key managerial personnel, promoters and directors of promoters; and (viii) information
regarding the process by which ADS holders who cancel their ADSs and take delivery ofthe
underlying Shaxes prior to the Record Date would be able to participate in the Issuer Tender
Offer, including instructions on the procedure for tendering Shares, includzng Shares delivered to
them upon cancellation of their ADSs, and instructions on the procedure for submitting ADSs to
the Depositary for cancellation. The postal ballot process will take approximately 30 to 35 days
following mailing of the postal ballot.
As required under the Buyback Regulations, the Company will make an Initial Public
Announcement of the Issuer Tender Offer. 7n the Initial Public Announcement, the Company
will disclose the actual price per Share ofthe Issuer Tender Offer and the maximum number of
Shares sought in the Issuer Tender Offer. As required, the Initial Public Announcement will be
published in at least one English national daily newspaper, one Hindi national daily newspaper,
and a regional language daily newspaper, all with wide circulation where the registered office of
the Company is located in India. The Company will additionally publish the Initial PuUlic
Announcement in a U.S. newspaper with national circulation, being the Wall Street Journal, the
New York Times or the Washington Post. The Initial Public Announcennent will be available on
the websites of SEBT and the Indian Stock Exchanges. The Initial Public Announcement will be
filed with the Commission on Schedule TO-C as preliminary issuer tender offer communications
and furnished to the Commission on Form 6-K. Once the Initial Public Announcement is
published, under Indian law the Issuer Tender Offer cannot be withdrawn by the Company.
As described earlier in Section I, the Buyback Regulations provide that the issuer must fix
a specific record date fox the purpose of determining entitlements and, thereafter, the issuer and its
stock transfer agent shall compute the entitlement of all shareholders based on their shareholding
on this record date.
Within five working days from the date of zeceipt of communication of final connments
on the draft Letter of Offer from SEBI,the Company will dispatch the final Letter of Offer to all
shareholders holding Shares on the Record Date, in accordance with Indian law. For the
shareholders, including shareholders in the United States, who have registered their email
addresses with the depositories, the Letter of Offer shall be dispatched via email delivery on the
date of dispatch. If shareholders who have been sent the Letter of Offer through electronic
to
means wish to obtain a physical copy of the Letter of Offer, they znay send a request in writing
the Company or the Company's Transfer Agent at the address or email address noted on the
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL. CORPORATION
Division of Corporation Finance
August 16, 2017
Page 16
cover page of the Letter of Offer. For the shareholders, including shareholders in the United
States, who have not so registered their email address, physical copies of the Letter of Offer shall
be dispatched by registered post, speed post, or courier. For U.S, shareholders who have not so
registered their email addresses, physical copies of the Letter of Offer, in addition to being sent
by registered post to their address registered with the depositories in accordance with Indian law,
will also be sent by expedited commercial courier for delivery within three business days.
The Letter of Offer will include a statement that the Company expresses no opinion as to
whether shareholders should participate in the Issuer Tender Offer and, accordingly, the
shareholders are advised to consult their own advisors to consider participation in the Issuer
Tender Offer.
On the date the Letter of Offer is dispatched to the shareholders and in compliance with
Rule 13e-4, the Company intends to publish a summary advertisement in the U.S. national
edition of a widely circulated publication, being the Wall Street Journal, the New York Times or
the Washington Post, disclosing the price per Share of the Issuer Tender Offer, the maximum
number of Shares sought in the Issuer Tender Offer, the 10 working days Tendering Period
during which the Issuer Tender Offer will remain open, and the other disclosures required under
Rule 13e-4(d). The summary advertisement will state that the Letter of Offer has been sent to
shareholders and is available on the official website of SEBI. Such summary advertisement will
also provide that the tender offer materials, including a transmittal letter, are available to any
Eligible Shareholder upon request, at the Company's expense.
In further com.pliar~.ce with Rule 13e-4; the Company will file (i) as soon as practicable on
the date of apre-commencement communication, any pre-commencement written
communication relating to the Issuer Tender Offer, from and including the first public
announcement of the Issuer Tender Offer;(ii) as soon as practicable on the commencement date
of the Issuer Tender Offer, a Schedule TO—I that will include, among other items, a summary
term sheet required by Item 1 of Schedule TO and other exhibits required pursuant to Schedule
TO;(iii) amendments)to the Schedule TO to promptly report any material changes in the
information disclosed previously and the results of the offer; and (iv) an amendment to the
Schedule TO pxomptly reporting the results of the Issuer Tender Offer.
As of July 21,2017, the Company believes there were approximately 232 U.S.
shareholders, consisting of FT Investors, FP Investors and other investors not resident in India,
representing approximately 11.9% of the outstanding Shares. The Company believes it has
852G462_26.doc
Wilson Sonsini Goodrich &Rosati
PROF65S10NAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 17
obtained physical mailing addresses for all of these investors. As of July 26, 2017, the Company
believes there were approximately 41,327 beneficial holders of ADSs who reside in the United
States, representing approximately 9.9% ofthe outstanding Shares.l~
The Issuer Tender Offer will be opened not later than five working days after the date of
dispatch ofthe final Letter of Offer as required under Regulation 9(3) ofthe Buyback
Regulations. Accordingly, between the dispatch ofthe Letter of Offer to the shareholders and
closing ofthe Issue Tender Offer, 14 working days (or approximately 18 calendar days) will
elapse.
On behalf ofthe Company, we respectfully request the that Staff grant exemptive relief
with respect to Rule 13e-4(fl(1) and Rule 14e-1(a) to permit the Issuer Tender Offer to remain
open for 10 working days.
B.
Record Date.
Rule 13e-4(fl(8)(i) under the Exchange Act provides that a tender offer must be open to
all secwrity holders ofthe class of securities subject to the tender offer during the period such
offer remains open. This "all-holders" rule prohibits discriminatory treatment of security holders
ofthe class of securities subject to the tender offer. The Buyback Regulations provide that the
issuer must fix a specific record date, and that only shareholders as ofthe record date are eligible
to participate in the Issuer Tender Offer. Absent a record date, the Company and its Transfer
Agent could not determine Entitlements as such Entitlements are based on each individual's
shareholdings as of a specific date. In addition, the agenda for the SEBI board meeting on
January 3,201218 stated that the Buyback Regulations should be amended to require a "record
date" since the buyback offer process is one ofthe corporate actions by a company,such as rights
issues, bonus issues, payment of dividends, etc. Hence, we are advised that introducing the
"record date" in place ofthe previously required "specified date"19 was considered more
appropriate by SEBI. This record date requirement under the Buyback Regulations is inconsistent
with the plain reading of Rule 13e-4(fl(8)(i).
"As noted above,the Company cannot determine the residency ofthe holders of approximately 5.7% ofthe
outstanding Shares (including holders of ADSs representing Shares).
t$ http://www.sebi.gov.in/sebi_data/meetingfiles/1326176942575-a.pdf
19 previously, in connection with a buyback, companies were required to seta "specified date" for purposes of
determining to whom the letter of offer would be sent; such specified date did not affect which shareholders would
be eligible to participate in the buyback.
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 18
U.S. holders ofthe Shares and A.DSs will receive advance notice of the upcoming Issuer
Tender Offer through the postal ballot process, SEC filings and newspaper publications in the
United States, and the Company's website. As a result, they will be informed as early as
Shares
approximately 39 to 44 days prior to the Record Date that they will need to be holders of
intend
who
holders
ADS
Offer.
as ofthe Record Date in order to participate in the Issuer Tender
and
ation
to participate in the Issuer Tender Offer will need to surrender their ADSs for cancell
Record Date.
withdraw the Shares underlying such ADSs from the depositary facility prior to the
re-deposited
Such Shares(including any Shares not accepted in the Issuer Tender Offer) may be
into the depositary facility.
relief
On behalf ofthe Company, we respectfully request that the Staff grant exemptive
only
with respect to Rule 13e-4(fl(8)(i) to permit the Issuer Tender Offer to be offered to
and regulations.
shareholders as ofthe Record Date in accordance with applicable Indian laws
C.
AllocationlProrationfor a Tender Offer.
for fewer
Rule 13e-4(x(3) under the Exchange Act requires that if an issuer tender offer is
d
tendere
es
of
securiti
number
the
if
and
than all ofthe outstanding equity securities of a class,
must
issuer
the
for,
pay
anal
up
exceeds the number that the issuer is bound or willing to take
rding fractions, according to
accept and pay for the securities as nearly as may be pro rata, disrega
that the offer remains
the number ofsecurities tendered by each security holder during the period
(3)involves the
13e-4(x
Rule
ed
by
mandat
as
open. Stated differently, tender offer proration
d.
tendere
shares
all
and
application of the same proration factor for all shareholders
specific record date
In contrast, the Buyback Regulations provide that the issuer must fix a
er, the issuer
thereaft
and,
ments
for the Issuer Tender Offer for the purpose of determining Entitle
k size
buybac
based on the
and its transfer agent shall compute the Entitlement of all shareholders
k Regulations were annended
and their individual shareholding as ofthe record date. The Buybac
ofSEBI wkuch considered this
in 2012 to provide for this concept. The agenda for the meeting
all shareholders was being
amendment20 noted that the principle of equitable treatment to
ds, but not in the case ofa
followed for xights issues, bonus issues and payment of dividen
tendered by the shazeholder
buyback. Acceptance in a buyback was made in proportion to shaxes
which was different in the case of
and not in proportion to the shareholding ofthe shareholders,
and paynnent of dividends. There was
other corporate actions such as rights issues, bonus issues
lder could tender, i.e. a shareholder
also a restriction on the number of shares which a shareho
zo http://www.sebi.gov.in/sebi_data/meetingfiles/1326176942575-a.pdf
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFbSS10NAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 19
could not tender shares in excess ofthe number ofshares to be bought back. However,this
practice was noted by SEBI to be discriminatory among the shareholders and therefore violative
ofthe principle of equitable treatment to all shareholders. In light ofthese considerations,the
Buyback Regulations were amended fo include the concept offixing the Entitlement of
shareholders.
Further, under Regulation 9(6)ofthe Buyback Regulations, the Shares proposed to be
bought back are divided into two categories(a) a "reserved category" for Sma11 Shareholders; and
(b)a "general category" for General Shareholders. The Entitlement of a shareholder in each
category is calculated accordingly. Pursuant to Regulation 6 of the Buyback Regulations, 15% of
the number of Shares which the issuer proposes to buy back or the number of Shares entitled as
per their shareholding, whichever is higher, must be resezved for Small Shareholders. This rule
effectively requires the Company to reserve 15% of the number of Shares to be bought back in the
Issuer Tender Offer for Small Shareholders. Thus, in practice, the Small Shareholders'
Entitlement is usually greatex than the Entitlement for General Shareholders.
The issuer must purchase all shares tendered by each shareholder who has tendered less
than oz up to his ox her Entitlement. For those shareholders who tender a number of shares in
excess of his or her Entitlement, the issuer will accept all shares tendered by each shareholder up
to his or her Entitlement and, depending on the availability ofthe buyback size, will accept on a
pro rata basis based on the number of shares tendered by shareholders who tendered shares in
excess of their respective Entitlements. As described in Section II.A, if there is an under-tender
by the Small Shareholders as a group or by the General Shareholders as a group, additional
shares will be bought back pro rata among shareholders in the under-tendering group who
tendered more than their respective Entitlement and,thereafter, any remaining shares will be
bought back pro rata among a combined pool of Small Shareholders and General Shareholders
who tendered more than their Entitlement.
The Issuer Tender Offer will be for a small portion ofthe outstanding Shares(up to
approximately 6.0%, subject to final determination by the Company's board of directors). There
is no requirement that a minimum number of Shares be tendered under the Buyback Regulations.
Therefore, ifless than the amount of Shazes sought in the Issuer Tender Offer is tendered, all
Shares validly tendered will be taken up and paid for in the Issuer Tender Offer.
To align the process of a buyback with other corporate actions such as rights issues, bonus
issues and payment of dividends with the principle of equal treatment to all shareholders, this
system of Entitlements to the Buyback Regulations was introduced in the Buyback Regulations
on January 3, 2012, with effect from February 7,,2012.. The system of Entitlements under the
Buyback Regulations, particularly the special treatment of Small Shareholders, is contrary to the
8526462_26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIONAL CORPORATION
Division of Corporation Finance
August 16, 2017
Page 20
plain reading ofthe pro rata allocation mandated under Rule 13e-4(fl(3) and the general principle
ofequal treatment under Rule 13e-4.
As previously discussed in Section TI.A., ADS holders who wish to be able to participate
in the Issuer Tender Offer will have a minimum of approximately 39 to 44 days advance notice
that to be eligible to participate in the Issuer Tender Offer they must withdraw Shares underlying
their ADSs fronn the depositary facility prior to the Record Date so that they will be holders of
shares on the Record Date. Prior to effecting the withdrawal, ADS holders will have been
provided all material information concerning the Issuer Tender Offer, including the price per
Share ofthe Issuer Tender Offer, the maximum number of Shares sought in the Issuer Tender
Offer, and the process by which ADS holders can participate in the Issuer Tender O£fer.
Each U.S. holder of Shares, including each former ADS holder who cancelled ADSs,
withdrawn the Shares represented thereby and become a shareholder as of the Record Date, will
be allocated an Entitlement that is dependent on his or her shareholdings as ofthe Recoxd Date.
As such, Small Shareholders who reside in the United States, including Small Shareholders who
became such thxough withdrawal of Shares underlying ADSs, would sinnilarly benefit from the
relatively "larger" Entitlement applicable to Small Shareholders.
On behalf ofthe Company, we respectfully request that the Staff grant exernptive relief
with respect to Rule 13e-4(x(3)to permit the Issuer Tender Offer to be allocated initially based
on Entitlennents and thereafter on a pro rata basis in accordance with applicable Indian laws and
regulations.
IV.
Conclusion
- Issuer tender offers in India, including the Company's proposed Issuer Tender Offer, are
subject to the Indian regulatory regime as prescribed under the Companies Act, 2013, and the
rules made thereunder, and the Buyback Regulations. Due to the conflict between Rule 13e-4
and Rule 14e-1 and mandatory Indian law requirements, in the absence of exemptive reliefthe
Issuer Tender Offer cannot be implemented without violating either the U.S. or Indian
regulatory regimes. Accordingly, on behalf ofthe Company, we respectfully request that the
Staff grant the Company exemptive relieffrom Rule 13e-4 and Rule 14e-1 to permit the Issuer
Tender Offer to be(z) open for a period often working days;(ii) offered to only holders of
Shares as ofthe Record Date; and (iii) allocated initially based on Entitlements and thereafter on
a pro rata basis, all in accordance with applicable Indian laws and regulations. The exemptive
relief requested will enable the Company to avoid issues arising out ofinconsistencies between
Rule 13e-4 and Rule 14e-land Indian legal requirements with xespect to the Issuer Tender Offer,
which the Company believes is in the interest of all shareholders of the Company,including
8526462 26.doc
Wilson Sonsini Goodrich &Rosati
PROFESSIOiVAL CORPORATION
Division ofCorporation Finance
August 16,2017
Page 21
U.S. shareholders.
If you have any questions or require any additional information, please contact us at
(650)493-9300.
Sincerely,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
Steven V.Bernard
Bradley L.Finkelstein
cc: Inderpreet Sawhney,Infosys Limited
Sai Krishna Bharathan, AZB &Partners
Sugandha Asthana, AZB &Partners
8526462_26.doc
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August 16, 2017
Securities and Exchange Commission
Division of Corporation Finance
Securities and Exchange Commission
100 F Street N.E.
Washington, D.C. 20549-1090
Attention:
Ted Yu, Chief, Office of Mergers and Acquisitions
Christina E. Chalk, Senior Special Counsel, Office of Mergers and Acquisitions
Christina M. Thomas, Attorney-Adviser, Office of Mergers and Acquisitions
Partial Cash Issuer Tender Offer far Shares of Infosys Limited
Re:
Ladies and Gentlemen:
1.
We refer to the letter, dated August 16, 2017 (the "Letter"), sent to the U.S. Securities and
Exchange Commission (the "SEC") by Wilson Sonsini Goodrich &Rosati, Professional
Corporation, on behalf of Infosys Limited, a public limited company incorporated under the
laws of India (the "Company") with respect to the proposed partial tender offer for cash (the
"Issuer Tender Offer'}. In the Letter, the Division of Corporation Finance of the SEC (the
"Staff") has been requested to grant exemptive relief to the Company from certain rules
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"}, that may be
applicable to the Company at the time of undertaking the Issuer Tender Offer.
2.
We are acting as advisers to the Company concerning Indian legal matters in connection
with the Issuer Tender Offer. In such capacity we have been requested to review the Letter
prepared by Wilson Sonsini Goodrich & F2osati, Professional Corporation from an India law
perspective and to provide you with this letter confirming certain statements relating to Indian
law, regulation and practice as set out in the Letter -(the "Support. Letter").
3.
We have reviewed the statements relating to Indian laws: regulations and practice (the
"Indian Statements") as set out in the Letter and confirm that, in our opinion, the Indian
Statements are fair and accurate summaries of such law, regulation and practice, and in our
opinion, complete for the purpose of the Letter. We note the following:
(a) The Indian Statements consist of summaries of relevant matters of Indian la~v and
regulation, or as the case maybe, Indian practice and should not be construed as a
comprehensive description of all law, rules, regulations and practice. Such laws and
regulations are subject to interpretation by the competent authorities, including Securities
and Exchange Board of India.
(b) Except as set out below, this Support Letter may not be reproduced, referred to, or
quoted in any offering materials, disclosure materials or printed matter related to the
Issuer Tender Offer.
(c) VVe consent to the Support Letter being attached to the Letter.
(d) In rendering this Support Letter, we have reviewed such laws of India as we considered
relevant and necessary, and we have not made any investigation of, and do not express
any opinion on, the laws of any jurisdiction other than the laws of India as applicable on
the date of this Support Letter.
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In addition, we confirm that the Securities and Exchange Board of India ("SEBf'} has not
been delegated with any specific power to grant exemptions under the SERI (Buyback of
Securities) Regulations, 199$, as amended ("Buyback Regulations"). The Buyback
Regulations do not grant any further powers to SEBI to grant any procedural exemptions and
there is no legal process in place that would require SEBI to necessarily grant, reject ar react
to an application for an exemption not contemplated by the Buyback Regulations.
4.
Sincerely,
For AZB &Partners
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.