This move on part of the company can lead to triggering of an open offer.
The company's, Everonn Education, shares rose on the news and hit the upper-trigger limit at the Bombay Stock Exchange, as the Chennai-based provider of technology-based education services to schools said it plans to issue shares to the Varkey Group at 528 rupees each, a 51% premium over the closing share price as on September 19, 2011.
The company also said in its filing on the BSE, on allotment of shares the Varkey Group will be considered as people acting in concert; they will be treated as part of the promoter group or key investors' group.
In the announcement the company also said that on preferential allotment to Varkey Group will trigger an open offer for the public shareholders of the company as per the Securities and Exchange Board of India's (SEBI's) rules. But the company didn't give any details on pricing of the open offer.
The share price of the stock was battered after the premiere investigating agency of the country, Central Bureau of Investigation (CBI), arrested Everonn's founder and managing director P Kishore, for allegedly bribing a tax official.
After the arrest, Chairman Jamshed J Irani also resigned from the company earlier this month. To deal with the vacuum at the higher level, Everonn named Susha John its new chief executive officer. The newly appointed executive will exercise the powers delegated to the managing director.