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Our Bureau

Plans amendment in Securities and Exchange Commission filing

Mumbai , June 20

Citigroup Global Markets, along with other Citigroup companies, said it has acquired 6.3 per cent stake in telecommunications company Videsh Sanchar Nigam Ltd, in its filing with Securities and Exchange Commission, US, on June 19.

However, news agencies reports coming in late evening on Tuesday said that Citigroup was planning an amendment in its SEC filing to announce that its stake in VSNL was around 3 per cent only, and not 6.3 per cent.

Dow Jones reported: "Citigroup Inc (C) planned to immediately amend a filing with the Securities and Exchange Commission regarding its passive stake in Indian telecommunications company Videsh Sanchar Nigam Ltd (VSNL). "The New York financial services holding company said it has beneficial ownership of less than 3 per cent of the company's outstanding shares, not the 6.3 per cent it reported in a Schedule 13G filed Monday with the SEC.

"Trading in Videsh Sanchar Nigam was delayed on Tuesday." The Citigroup's original SEC filing said the group holds 18.61 million shares in VSNL, through buying American Depository Receipts on the New York Stock Exchange, where VSNL is listed. One ADR equals two equity shares of VSNL.

Being a passive investor, which sought no control in the acquiree company, Citigroup did not provide any other details of the acquisition including the price. However on Monday, VSNL closed at $15.7 per ADR at which price the 6.3 per cent stake would work out to $146 million (around Rs 660 crore).

VSNL rose on the Indian bourses, its scrip rising 3.21 per cent on Tuesday over Monday's close of Rs 359.45, ending the trading day at Rs 371. On the NSE it rose 3.45 per cent over the day, closing at Rs 371.45.

The scrip's rise over the week has been significant. On the BSE, it rose 19.5 per cent over last Tuesday's closing price of Rs 311.10.

Volumes of the scrip have been unusually high as well. Tuesday's traded volumes of VSNL on the BSE amounted to 13.34 lakh shares as against the last two-week average of 8.5 lakh shares daily. On the NSE, volumes amounted to 33 lakh shares on Tuesday.

As on March 31, 2006, the total foreign holding in VSNL was 15.7 per cent. FIIs held 9.66 per cent stake in the company. (And, as on March 31, 2006, Citibank Markets Mauritius held 1.29 per cent stake in VSNL.)

Since the scrip is fungible, ADRs and Indian equity shares are mutually convertible so that even a 6.3 per cent acquisition is possible although the total ADR holding as on March 31, 2006 was 5.99 per cent.

Citigroup has been rather active in India in the recent times. In May this year, it decided to acquire 9.27 per cent stake in housing finance company Housing and Development Finance Corporation Ltd from Standard Life, UK.

IDEA deal completed

The Aditya Birla group bought out the Tata group's equity in IDEA Cellular Ltd on Tuesday, formally concluding the transaction that was announced earlier.

The AV Birla group bought 48.14 per cent stake in IDEA from the Tatas for Rs 4,406 crore, said a news release from the company. (This places the company's valuation at over Rs 9,000 crore.) The group now holds 98.3 per cent stake in IDEA, split among several AV Birla group companies. Aditya Birla Nuvo Ltd holds 35.7 stake in IDEA, Birla TMT Holdings Ltd 44.9 per cent, Grasim Industries Ltd 7.6 per cent, and Hindalco Industries Ltd 10.1 per cent.

Said Aditya Birla Group Chairman, Mr Kumar Mangalam Birla, "The IDEA name has come to stand for value and innovation in the eyes of its millions of subscribers. We shall raise the bar and aim that Idea represents the very best across all product and service categories." Sources close to the transaction said that the group's plans were to find a new joint venture partner or stakeholder in the company, possibly from overseas.

More Stories on : Telecommunications | Mergers & Acquisitions | Foreign Institutional Investors | Videsh Sanchar Nigam Ltd

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