The Hindu Business Line : Data Access to offload 30-35% equity — Scraps IPO plans on objections from SEBI

INTERNATIONAL long distance telephony company Data Access is close to selling 30-35 per cent equity to a large global investment fund for about Rs 100-150 crore. The move comes in the wake of company's decision to scrap its plans to go for an Initial Public Offering following objections raised by the Securities and Exchange Board of India.

Post dilution, the Siddharth Ray promoted SPA Enterprises' equity in the company is expected to come down to nearly 50 per cent from the current holding of 74.5 per cent. Hong Kong-based investment firm PCCW, which currently has 24 per cent stake in Data Access, is likely be left with about 15 per cent. PCCW had earlier held 74 per cent of the company's equity but had sold off about 50 per cent to SPA Enterprises.

Data Access had initially proposed to offload 25 per cent of its equity through the IPO to raise about Rs 80-100 crore which would have allowed PCCW to bring down its stake to about 16 per cent. The money was to be used for expansion plans and debt servicing. The IPO ran into rough weather with SEBI pointing out that the company owed close to Rs 84 crore to Bharat Sanchar Nigam Ltd and some of its directors had violated FERA norms.

The fresh deal being formalised by Data Access with the global investment company also has a debt component built into it. When contacted, Mr Siddharth Ray, Managing Director, Data Access refused to comment. Sources close to the deal, however, confirmed that the company was moving the Foreign Investment Promotion Board and the Reserve Bank of India for necessary approvals.

Data Access, which has a paid-up share capital of Rs 149 crore, claims to have cornered 30 per cent of the ILD market. For the year 2002-03, Data Access reported revenues of Rs 622 crore. The move from the company assumes significance in the light of the Government's proposal to allow foreign institutional investors to pick up to 74 per cent stake in Indian telecom service providers.

Data Access had initially launched itself in the Indian market in 1999 as an Internet Service Provider under the brand NOW. However, with the Internet business not making much headway, the company became the first private international long distance player in the market. Since then it has set up a subsidiary in USA, UK and Sri Lanka for offering ILD services.

More Stories on : Telecommunications | Restructuring | Mergers & Acquisitions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Public debate likely on taxation of BPO units

Data Access to offload 30-35% equity — Scraps IPO plans on objections from SEBI

We will take a re-look at free trade pact with Thailand: PM

Price cuts, ad spend shave HLL profit by 46 pc in Q2

TCS IPO opens with bids for 91 pc shares

Uptrend in wheat prices: What's driving them?

Banking, oil stocks in the limelight

IDBI Bank to merge with IDBI — Trust to take over Rs 9,000-cr NPAs

FIIs buy into IDBI; LIC bullish in IDBI Bank

Merger to create fast-growing, mid-size bank