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iGATE Patni is offering Rs 520 a share for delisting against a floor price of Rs 356 a share.
In January 2011, US-based iGATE completed the acquisition of Mumbai-based Patni Computer Systems for $1.2 billion, and this development completes the acquisition process. Nasdaq-listed iGATE will spend $272 million on the delisting process. The company fixed the amount after it received the offer from Elliot Management, the hedge fund that holds maximum non-promoter shares of the company.
The company has received 15.9 million shares so far and they will all be saved in an Escrow account, Mr Phaneesh Murthy, CEO of iGATE Patni, said at a press conference. The other shareholders have another year to surrender their shares, he said.
The development will have no major impact of the operational side of the business but will pave the way forward in iGATE Patni's plans to rebrand the company and remove “Patni” from the brand name, Mr Murthy said.
Based on the performance of the company in the fourth quarter of 2011, the company has received a loan extension to $265 million from its bankers, Mr Murthy said. This brings the total debt to $1,035 million including the $770 million debt it had taken in April last year to fund the acquisition.
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