SIFY'S
NEW ADR OFFER GETS GREEN SIGNAL
DECKS have finally
been cleared for Sify's sponsored ADR issue. After putting
its offering on hold for RBI's approval, the FIPB has finally
given it a green signal now. The size of the sponsored ADS
issue shall not exceed 30 million equity shares, including
the greenshoe option. Satyam's ADS would amount to around
$360m. The Nasdaq listed Sify plans to convert 45 lakh local
shares into ADRs, which works out to around $32 million. Satyam
has a 32% stake in the company. The company is in the process
of identifying the lead manager and the pricing of the ADR
issue would be decided later.
Since the proposal
involves issue of sponsored ADRs, the board had earlier directed
that the comments of the RBI may be sought first before consideration
of the FIPB and deferred and proposal. While department of
economic affairs pointed out that the purchase of existing
shares by non-residents from resident shareholders is on automatic
route now, provided SAST regulations are not triggered and
FDI is permitted.
The company will
need to come back to the FIPB only if the foreign equity is
increased beyond 74%. Satyam spokesperson was not available
for comment.
The company currently
has a foreign holding of 58.1% and if the entire balance holding
of equity shares would be subscribed to in the ADR divestment,
the foreign holding would be 100%.
There would be
no change in the paid-up equity share capital of Sify pursuant
to the proposed sponsored ADR offering. The face value of
each equity share is Rs 10, which is fully paid-up and each
equity share will be represented by one ADR.
