letter to shareholders to sell off their shares at 5% value

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shital (Querist)
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27 May 2010 Dear ALl,

please forward me one draft letter to be send to the shareholders of one Ltd Company stating that since the Company is overburdened with loans and losses, Directors of the Company are proposing to sell of the Company to a buyer who intend to purchase the shares provided 95% is in his name. Directors believes that Company cannot wipe off this losses for next 5 years also. hence it is beneficial for shareholders to sell off their shares for 5% of its value rather than gaining nothing due to liquidation of the Company.

i am in urgent need of draft letter for the same and beg your help to draft the same.

if anybody has experienced or anybody has draft of such types of letters to shareholders please share it with me also.

eagerly waiting for your help...

regards,
Shital

Rasesh

Rasesh (Expert)
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27 May 2010 In my view, the directors cannot write such a request to the shareholders. The matter has to be first approved by the shareholders for change of management and then an option has to be given to the shareholders.

In such scenario, a scheme of arrangement would be a better option.

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