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Wednesday, May 15, 2002

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Tata's open offer for VSNL oversubscribed

Our Bureau

MUMBAI, May 14

THE Tata group's open offer for an additional 20 per cent stake in Videsh Sanchar Nigam Ltd (VSNL) has been oversubscribed more than 1.5 times.

The group will now have a 45 per cent stake in VSNL, having earlier bought a 25 per cent stake from the Government.

"The Tata group does not have any intention at present to increase its stake beyond 45 per cent; in addition it cannot retain any excess subscription," said a spokesperson on behalf of the group.

By the closing date of May 9, 2002, 8.76 crore shares were tendered under the open offer.

The offer is for 5.7 crore equity shares (including underlying ADSs) at Rs 202 per share at a total cost of Rs 1,151 crore. The shares would be accepted on a pro-rata basis, said a news release from the Tata group.

The amount of Rs 1,151 crore will be raised in the debt-equity ratio of 1:1. The debt will be raised through several banks and FIs, said the spokesperson.

The Tatas had earlier paid Rs 1,439 crore for a 25 per cent stake in the VSNL.

The purchase of shares through the open offer was being made through Panatone Finvest Ltd, together with other Tata companies, said the release. Panatone Finvest is a special purpose vehicle created by the Tata group for its acquisition of VSNL. Tata Sons has a 60 per cent stake in Panatone and Tata Power a 40 per cent stake.

The Tatas have invited Mr Subodh Bhargava to be on the board of VSNL. According to the spokesperson, Mr Bhargava had accepted the offer. The Government is understood to have named Mr Yashwant Bhave, an IAS officer now in the Ministry of Information, as its appointee on the board. The other Government nominee is Mr Rakesh Kumar.

Currently, the Tata group has Chairman Mr Ratan Tata, Managing Director Mr S.K. Gupta and Chief Operation Officer Mr N. Srinath as its directors.

The decision on how many more directors would be appointed by the Tatas and the Government would be made in course of time, the spokesperson added.

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