Draft Information Memorandum
For Private Circulation Only
JSA Comments: March 24, 2010
Srl. No: [ ]
Dated:March [26], 2010
STL Fertilizers Private Limited
Incorporated as a Private Limited Company under the Indian Companies Act, 1956
Date of Incorporation: Incorporated on 24/12/2004
Registered Office: A-60, Naraina Industrial Area, Phase I, New Delhi – 110 028
Tel. No.:011-41411071/72 Fax:011-25792194/25895622;
Issue of 1350Rated, Secured, Redeemable Non-Convertible Debentures of a face value of Rs. 10,00, 000/- each, aggregating upto Rs. 135 crores on a private placement basis (the “Issue”)
GENERAL RISKS
Investors are advised to take informed decision before taking an investment decision in this offering. For taking an investment decision the investor must rely on their examination of the offer and the offer including the risks involved. The Issue of Debentures has not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document.
LISTING
The NCDs offered through this Information Memorandum are proposed to be listed on the Whole Sale Debt Market Segment (“WDM Segment”) of the Bombay Stock Exchange Limited (“BSE”).
Lead Arranger Debenture Trustee Registrar to the Issue
Standard Chartered Bank / IDBI Trusteeship Services Ltd. / Indus Portfolio Private Ltd.ISSUE SCHEDULE
ISSUE OPENING DATE March30, 2010*ISSUE CLOSING DATE March30, 2010 *
*The Company reserves the right to change the Issue time table including the Deemed Date of Allotment (as defined hereinafter) at its sole discretion, without giving any reasons or prior notice.
TABLE OF CONTENTS
S. No. / Content / Page No.1 / Definitions and Abbreviations / 3
2 / Disclaimers / 5
3 / Issuer Profile / 15
- Overview of the Company
- Offering Information- Regulatory Disclosures
- Other Information and Issue Procedure
5 / Annexures / 37
Annexure 1: Term Sheet
Annexure 2: Credit Rating Letter from CRISIL
Annexure 3: Consent Letter from Debenture Trustee
Annexure 4: Application Form
DEFINITIONS AND ABBREVIATIONS
The Company / Issuer / STL Fertilizers Private Limited ,a company having its registered office atA-60 Naraina Industrial Area, Phase I, New Delhi – 110 028
Application Form / The form used by an Investor to apply for subscription to the Debentures offered through this Issue
Allot/Allotment/Allotted / Unless the context otherwise requires or implies, the allotment of theDebentures pursuant to the Issue
Beneficial Owner(s) / Holder(s) of the Debentures in dematerialized form as defined under section 2 of the Depositories Act, 1996
Board / Board of Directors of the Company or a Committee thereof
BSE / Bombay Stock Exchange Limited
Business Days / All days except Saturday, Sunday and any public holiday on which banks in Mumbai are open for business
Coupon Payment Date / Date of payment of interest on the Debentures
Credit Rating Agency(ies) / CRISIL
Crore / 1 crore = 10 million
Date of Allotment / The date on which Allotment for the Issue is made
Debentures / Rated,Secured, Redeemable Non-Convertible Debenture(s) of face value of Rs.10 Lakhs each aggregating up to Rs.135 crores issued by the Issuer pursuant to the terms and conditions set out in this Information Memorandum,
Debenture Holder(s) / Persons who are for the time being holders of the NCDs and whose names are last mentioned in the Register of Debenture Holders and shall include the Beneficial Owners
Debenture Trustee / Trustee for the Debenture Holder(s), in this case being IDBI Trusteeship Services Ltd.
Debenture Trust Deed / Means the debenture trust deed executed or to be executedinto between the Debenture Trustee and the Company in relation to the Issue
Deemed Date of Allotment / Means March 30, 2010
Depository(ies) / National Securities Depository Limited (NSDL) / Central Depository Services (India) Limited (CDSL)
Designated Account / Means an INR denominated designated account into which all amounts payable in connection with the Debentures pursuant to the Debenture Trust Deed shall be deposited, and which shall be operated in accordance with the written instructions of the Debenture Trustee (acting on the instructions of the Majority Debenture Holders) received by the Company from time to time
Exit Option / Means the irrevocable commitment of KRIBHCO to purchase the KSFL Shares from the Company under the provisions of the JVA in accordance with the terms thereof
FII / Foreign Institutional Investor (as defined under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995) registered with SEBI
Group Companies / Direct and /or indirect subsidiaries of the Company.
Guarantor / Means Shyam Basic Infrastructure Projects Private Limited, a company incorporated under the Act, with corporate identity number U64201RJ1996PTC020005 and having its registered office at B-2D, Shiv Marg, Bani Park, Jaipur, Rajasthan;
I.T. Act / The Income-tax Act, 1961 as amended from time to time
Information Memorandum / This Information Memorandum dated March [25], 2010 pursuant to which the Debentures are being offered for private placement
INR / Indian Rupees
Investor / Such person who subscribe to this Issue
ISIN / International Securities Identification Number
Issue / Issue by way of private placement of the Debentures by the Company
Issue Opening Date / March 30, 2010
Issue Closing Date / March 30, 2010
JVA / Means a joint venture agreement dated November 5, 2005 as amended pursuant to an amendment dated January 23, 2010 and as further amended and/or restated from time to time, existing between KRIBHCO and the Company.
KRIBHCO / Means Krishak Bharati Cooperative Limited, a multi state Co-operative Society registered under the Delhi Co-operative Societies Act, 1972 and now governed by the Multi State Co-operative Societies Act, 2002 and having its registered office at Red Rose House, 49 – 50, Nehru Place, New Delhi – 110 019
KSFL / Means Kribhco Shyam Fertilizers Limited, a company incorporated under the laws of India, having its registered office at Red Rose House, 49 – 50, Nehru Place, New Delhi – 110 019
KSFL Shares / Means the 120,022,855 equity shares constituting 15 per cent. of the issued and paid up equity capital of KSFL held by the Company and such other shares of KSFL as the Company may hold from time to time
Majority Debenture Holders / Means such number of Debenture Holders holding more than 50% of the nominal value of the Debentures outstanding from time to time
Mortgaged Property / Means the land in Debenture Nagar, Gujarat
Mutual Fund / A mutual fund registered with SEBI under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996
NRI / A person resident outside India, who is a citizen of India or a person of Indian origin and shall have the same meaning as ascribed to such term in the FEMA Regulations
BSE / Bombay Stock Exchange Limited.
Record Date / The record date for payment of interest or repayment of principal shall be 10 (Ten) working days prior to the date on which interest is due and payable on the Debentures, or the date of redemption of such Debentures.
Registrar/Registrar to the Issue / Registrar to the Issue, in this case being Indus Portfolio Private Ltd.
Register of Debentureholders / The register maintained by the Company containing the name of Debenture holders entitled to receive interest in respect of the NCDs on the Record Date, which shall be maintained at the Registered Office
ROC / The Registrar of Companies
RTGS / Real Time Gross Settlement
RBI / The Reserve Bank of India
SEBI / Securities and Exchange Board of India constituted under the Securities and Exchange Board of India Act, 1992 as amended
SEBI Regulations / The SEBI (Issue and Listing of Debt Securities) Regulations, 2008, as amended I
STL Shares / Means the 10,000 equity shares constituting 100 per cent. of the issued and paid up equity capital of the Company held by the Guarantor or such other shares that may be held by the Guarantor in the Company from time to time.
Sole Book Runner and Lead Arranger / The arranger appointed for the purposes of this Issue is Standard Chartered Bank (“SCB”)
Stock Exchange / The Bombay Stock Exchange Limited
The Act / The Companies Act, 1956 as amended
WDM / Wholesale Debt Market segment of the BSE
DISCLAIMERS
ISSUER’S DISCLAIMER
This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus. The Issue of Debentures to be listed on the WDM is being made strictly on a private placement basis. This Information Memorandum is not intended to be circulated to more than 49 (forty-nine) persons. Multiple copies hereof given to the same entity shall be deemed to be given to the same person and shall be treated as such. It does not constitute and shall not be deemed to constitute an offer or an invitation to subscribe to the Debentures to the public in general. This Information Memorandum should not be construed to be a prospectus or a statement in lieu of prospectus under the Act.
This Information Memorandum has been prepared in conformity with the SEBI Regulations, 2008.
This Information Memorandum has been prepared solely to provide general information about the Issuer to eligible investors to whom it is addressed and who are willing and eligible to subscribe to the Debentures. This Information Memorandum does not purport to contain all the information that any eligible investor may require. Further, this Information Memorandum has been prepared for informational purposes relating to this transaction only and upon the express understanding that it will be used only for the purposes set forth herein.
Neither this Information Memorandum nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other evaluation and any recipient of this Information Memorandum should not consider such receipt a recommendation to purchase any Debentures. Each Investor contemplating purchasing any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential Investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyze such investment and the suitability of such investment to such Investor's particular circumstances.By subscribing to the Issue, eligible investors shall be deemed to have acknowledged that the Issuer does not owe them a duty of care in this respect. Accordingly, none of the Issuer’s officers or employees shall be held responsible for any direct or consequential losses suffered or incurred by any recipient of this Information Memorandum as a result of or arising from anything expressly or implicitly contained in or referred to in this Information Memorandum or any information received by the recipient in connection with this Issue.
The Issuer confirms that, as of the date hereof, this Information Memorandum (including the documents incorporated by reference herein, if any) contains all information that is material in the context of the Issue and issue of the Debentures, is accurate in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein, in the light of the circumstances under which they are made, and are not misleading. No person has been authorized to give any information or to make any representation not contained or incorporated by reference in this Information Memorandum or in any material made available by the Issuer to any potential Investor pursuant hereto and, if given or made, such information or representation must not be relied upon as having been authorized by the Issuer.
This Information Memorandum and the contents hereof are restricted only for the intended recipient(s) who have been addressed directly and specifically through a communication by the Company and only such recipients are eligible to apply for the Debentures. All Investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue. The contents of this Information Memorandum are intended to be used only by those Investors to whom it is distributed. It is not intended for distribution to any other person and should not be reproduced by the recipient.
No invitation is being made to any persons other than those to whom application forms along with this Information Memorandum being issued have been sent. Any application by a person to whom the Information Memorandum has not been sent by the Issuer shall be rejected without assigning any reason.
The person who is in receipt of this Information Memorandum shall not reproduce or distribute in whole or part or make any announcement in public or to a third party regarding the contents without the consent of the Issuer.The recipient agrees to keep confidential all of such information provided (or made available hereafter), including, without limitation, the existence and terms of such transaction, any specific pricing information related to the transaction or the amount or terms of any fees payable to us or other parties in connection with such transaction. This Information Memorandum may not be photocopied, reproduced, or distributed to others at any time without the prior written consent of the Issuer. Upon request, the recipient will promptly return all material received from the Issuer (including this Information Memorandum) without retaining any copies thereof, all in accordance with such confidentiality agreement. If any recipient of this Information Memorandum decides not to participate in the Issue, the recipient must promptly return this Information Memorandum and all reproductions whether in whole or in part and any other information statement, notice, opinion, memorandum, expression or forecast made or supplied at any time in relation thereto or received in connection with the issue to the Issuer.
The Issuer does not undertake to update the Information Memorandum to reflect subsequent events after the date of the Information Memorandum and thus it should not be relied upon with respect to such subsequent events without first confirming its accuracy with the Issuer.
Neither the delivery of this Information Memorandum nor any sale of Debentures made hereunder shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Issuer since the date hereof.
This Information Memorandum does not constitute, nor may it be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. No action is being taken to permit an offering of the Debentures or the distribution of this Information Memorandum in any jurisdiction where such action is required. Persons into whose possession this Information Memorandum comes are required to inform themselves about and to observe any such restrictions. The Information Memorandum is made available to Investors in the Issue on the strict understanding that it is confidential.
DISCLAIMER CLAUSE OF THESTOCK EXCHANGE
As required, a copy of this Information Memorandum has been filed with the BSEin terms of the SEBI Regulations.
It is to be distinctly understood that submission of this information memorandum to the BSEshould not in any way be deemed or construed to mean that this Information Memorandum has been reviewed, cleared or approved by the BSE; nor does BSEin any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum, nor does the BSE warrant that the Issuer’s Debentures will be listed or will continue to be listed on the BSE; nor does the BSE take any responsibility for the soundness of the financial and other conditions of the Issuer, its promoters, its management or any scheme or project of the Issuer.
As per the provisions of the SEBI Regulations, a copy of this information memorandum has not been filed with or submitted to the SEBI. It is to be distinctly understood that this Information Memorandum should not in any way be deemed or construed to have been approved or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any proposal for which the Debentures issued thereof is proposed to be made or for the correctness of the statements made or opinions expressed in this Information Memorandum.
Disclaimer of the Sole Book Runner and the Lead Arranger
It is hereby declared that the Company/ Issuer has exercised due-diligence to ensure complete compliance of prescribed disclosure norms in this Information Memorandum. The role of the Lead Arranger in the assignment is confined to marketing and placement of the Debentures on the basis of this Information Memorandum as prepared by us. The Lead Arranger has neither scrutinized nor vetted nor have it done any due-diligence for verification of the contents of this Information Memorandum. The Lead Arranger shall use this Information Memorandum for the purpose of soliciting subscription(s) from qualified institutional investor(s) in the Debentures to be issued by us on private placement basis. It is to be distinctly understood that the aforesaid use of this Information Memorandum by the Lead Arranger should not in any way be deemed or construed to mean that the Information Memorandum has been prepared, cleared, approved or vetted by the Lead Arranger; nor should the contents to this Information Memorandum in any manner be deemed to have been warranted, certified or endorsed by the Lead Arranger so as to the correctness or completeness thereof.
Company Disclaimer Clause
The Company certifies that the disclosures made in this Information Memorandum is generally adequate and in conformity with the SEBI Regulations. Further, the Company accepts no responsibility for statements made otherwise than in the Information Memorandum or any other material issued by or at the instance of the Company and anyone placing reliance on any source of information other than this Information Memorandum would be doing so at his own risk.
Cautionary Note
This Information Memorandum is not intended to provide the sole basis of any credit decision or other evaluation and should not be considered as a recommendation that any recipients of this Information Memorandum should invest in the Debentures proposed to be issued by the Company. Each eligible investor should make its own independent assessment of the investment merit of the Debentures and the Company. Eligible investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstance. This Information Memorandum is made available to eligible investors on the strict understanding that it is confidential. Recipients shall not be entitled to use any of the information otherwise than for the purpose of deciding whether or not to invest in the Debentures.