ECom Express emergency sale to Delhivery late minority shareholders stranded

Copyright © HT Digital Streams Limit all rights reserved. An automatic sorting center at Delhivery’s Trucking Gateway in Tauru, a city in Haryana. The company today has 18 million square -meter logistics infrastructure. Summary Delhivery’s proposed acquisition of the majority stake of ECom Express – 99.4% who is jointly owned by Warburg Pincus, Partners Group and the British International Investment (BII) – left about ten minority investors, who have the remaining 0.6% of the company. Minority investors in ECom Express, who own about 0.6% of the e-commerce logistics firm, weigh their possibilities for selling their interest. This follows the company’s announcement of its sale to the larger competitor Delhivery. Delhivery’s proposed acquisition of the majority stake of ECom Express – 99.4% who is jointly owned by Warburg Pincus, Partners Group and British International Investment (BII) – left about ten minority investors, who have the remaining 0.6% of the company, to navigate their exit options independently. Delhivery agreed to acquire the Gurugram-based company in an all-Cash emergency sale worth £ 1,407 crore in April. It is only a fifth of £ 7,000 valuation that the company tries to search through an initial public offer. Also read: Can Ecom Express’s IPO pass when Delhivery’s share failed to deliver “despite being one of the first believers in the company and long -standing shareholders of ECom Express, we were not informed or consulted on the proposed transaction,” Anish Jhaveri, an angel investor. Investors are concerned about the proposed purchase of Delhivery, awaiting NOD of the Competition Commission of India (CCI), except other regulatory approvals. Jhaveri, who owns a 0.5% stake in the business, says he is investigating options. “It would be naive to assume that the voice of minority shareholders, especially founding investors, would be unheard of before the appropriate regulatory bodies, including the Ministry of Corporate Affairs and the Competition Commission of India. We evaluate our options and expect full transparency in the interests of corporate governance and investor rights,” Jhaveri added. Also read: KKR, TPG Eye Relisys Medical Devices in Early Phase Purchase Tares Jhaveri feels that the ‘waterfall mechanism’ clause in investor agreements has significantly diluted its interest and early investors. Private investors usually contain a ‘waterfall mechanism’ clause in share purchase agreements to arrange the order in which shareholders will be paid in the event of a sale. Those with preference shares are allowed to take out their priority investment amount and the capital is then distributed among other shareholders. It becomes critical in situations where there is an emergency sale. Experts weigh on minority rights. It is still unclear how minority investors will continue, and whether they have enough legal status to jeopardize the conclusion of the agreement. According to Sudip Mahapatra, partner at the law firm S&R Associates, “the minority shareholders who own less than 1% of the target business will have a very limited ability to oppose a sale of the company. Mahapatra said. Partners Group, Warburg Pincus, Delhivery and BII declined to comment on this news story. Sanket Jain, partner at law firm Pioneer Legal, said that Delhivery is not automatically obliged to acquire the remaining minority interest in Ecom Express “unless there is a specific contractual obligation to do so”. Also read: JP Morgan sees that more Indian firms are going to go shopping abroad “Since Delhivery now has more than 99% of the ECom Express, it is legally entitled to start a printing process under section 236 of the Companies Act, 2013, which enables it to obtain the remaining shares at a reasonable value in the right. strive. Layouts and losses ECom Express saw that the company’s revenue is a drastic hit after the entry of the e-commerce platform Most Ho’s logistics arm in the segment. (https://www.livemint.com/companies/ecom-express-ipo-delhivery-eshho-flipkart-blue-dart-delivery-e-mommerce-logistics-xpressbees-shadowfax-172975612075.html) earlier, Closed, Mint reports. Also read: Global PE firms Eye Stake in Tessolve at $ 300 million valuation The expenses of the company rose slightly to £ 2,921.5 crore in FY24 from £ 2,902.8 crore in FY23. ECom Express reported a 2.2% growth in turnover to £ 2,609.2 crore in FY24, and the losses fell to £ 255.8 from £ 428.1 in the previous year. Catch all the corporate news and updates on live currency. Download the Mint News app to get daily market updates and live business news. More Topics #Logistics #E-Commerce Read Next Story