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Deal Maker of the Year Awards 2012 WINNER - INDIA
DEAL: Valiant Mauritius Invests In Shriram Housing Finance
NAME: V N Shiva Shankar COMPANY: VNS Legal, Advocates POSITION: Founder & Lawyer ADDRESS: 5th Floor, Mookambika Complex 4, Lady Desika Road, Mylapore, Chennai 600 004
TEL: +91.44.2499 7133 FAX: +91.44.2499 0549
BIO:
V N Shiva Shankar is a lawyer and is the founder of VNS Legal, a corporate law firm, based in Chennai. VNS Legal is a boutique law firm focussing primarily on transaction support services covering areas of mergers & acquisitions, strategic investments, legal due diligences, and joint ventures and also providing advisory services on capital market regulations and takeover offers.
Shiva Shankar, after completing a graduation in commerce went on to complete his law degree from the Madras Law College securing a top rank holder in law. He is also a member of the Institute of Cost & Works Accountants of India and a member of the Institute of Company Secretaries of India.
Shiva Shankar has a rich experience of working in various large corporate houses in India in the legal, taxation & compliance divisions and has worked on several transactions and has built up a significant expertise in the financial services sector.
He is closely associated with the “Madras Chamber of Commerce”, one of India’s oldest Chambers of Commerce, and has also headed the Financial Sector Committee of the Madras Chamber. A passionate academician – he is also a visiting faculty at various professional institutes in India speaking on corporate laws & foreign exchange.
DEAL OVERVIEW: Q
Please summarise the transaction
The transaction was an investment by an over- seas private equity investor into an Indian Company. The Indian company was engaged in a sector in which there were restrictions on securing foreign direct investment.
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What was your role within the transaction?
We acted as Domestic Legal Counsel to the Indian Company and we had to structure the transaction to be in conformity with the applicable regulations in India as well as offering a solution to the overseas Investor addressing their requirements.
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What were the challenges or difficulties presented?
The transaction presented complex problems – both on the regulatory front as well as on the documentation front. On the regulatory end, we had to deal with the current restrictions imposed on foreign investments in the Indian company. This was compounded by the requirement of the Investor to have a variable conversion terms and the flexibility to invest over a period of time.
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How were the challenges or difficulties overcome?
The challenges were overcome by devising a structure and instrument which offered adequate protection to the investor in the event of a drastic change in either the regulatory environment or in the performance of the Company, while at the same time providing a degree of freedom & control to the Indian promoters to run the operations and fund the Company. Multiple scenarios and combinations were meticulously documented and approved by
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the parties. Both parties approached the challenges with an open mind and a willingness to resolve issues, which contributed significantly to the successful closure of the deal.
What other types of clients or transactions have you been involved with?
VNS Legal has been involved in several transactions involving a combination of private equity investments and strategic joint ventures. A recent notable transaction was one involving an Indian healthcare company which operates in a unique niche space in which two large overseas private equity funds invested and acquired a significant stake. This deal involved critical examination of the applicable regulatory provisions as well as extensive documentation considering that the Indian company already had three existing investors.
In addition to providing legal support for transactions, VNS Legal also focuses on compliance audits and legal advisory services wherein we provide inputs on legal issues referred to enable the management to take appropriate remedial steps. We also work closely with certain large companies to constantly review and monitor the regulatory environment and assist them in voicing their concerns with the regulator.
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What are your thoughts and predictions for 2013 and beyond?
The Indian financial markets are adapting well to the global developments. There is still a huge potential and requirement for capital amongst local companies especially those having a domestic market. These sectors will continue to grow and do well and we foresee a lot of consolidations and strategic acquisitions taking place in India in the coming years.