Satyam sells 3% in Sify via ADS
By siliconindia staff writer   |   Tuesday, 07 October 2003, 19:30 IST
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MUMBAI/HYDERABAD: Satyam Computer Services, the largest stockholder in Nasdaq-listed Sify, has sold 1m equity shares of Sify in a private placement through Sify’s sponsored ADR programme, reducing its interest in the company by a sizeable 3%. Satyam has been trying to offload its stake in the internet services company for over two years, and has been actively scouting for buyers during the last six months. Venture Tech, a US-based venture capital fund, bought the stake on October 1 at Rs 198.9 per share, taking its stake in Sify to 16% from 13%. The move brings down Satyam’s shareholding in Sify from approximately 35% to 32% now. Another investor, CDC’s South Asia Regional Fund, is selling its entire stake of 10.6% or 3.6m shares in Sify through the same route. This sale has not been closed yet. The total size of the sponsored ADR issue was 4.6m shares or 13.6% of Sify. ICICI Securities is the lead manager of the company’s sponsored ADR program. “The shares were placed in a pool overseen by a lead manager so that buyers could buy at the same price under private placement. The price was marked to market. It is good that existing investors like Venture Tech have chosen to increase their stake further by buying from the pool. This shows their commitment to the company’s business model,” Sify’s official spokesperson said. This is the second sponsored ADR issue from Sify this year. In July ‘03, Sify completed the sale of 1,017,441 ADSs, representing 1,017,441 equity shares to Venture Tech. Satyam Computer was again a seller in this transaction and reduced its equity to 35% from over 38% earlier. Sify had also raised money through a fresh issue of equity in ‘02. It sold 7.6m ADS to Softbank Asia Infrastructure Fund (SAIF) for $13m and approximately 4.1m equity shares to Venture Tech Solutions for $7m in October ‘02. The board of directors of Sify reconstituted in December ‘02 to take representatives of the new investors, comprising two nominees each of Satyam Computer Services and SAIF, one nominee each from Venture Tech and South Asia Regional Fund, (SARF) two independent directors and Sify’s managing director. CDC SARF was one of the first venture funds to invest in Sify in February-March 1998. The fund now has exited its investment in the company but there is still a chance the shares might be picked up by another international fund of CDC. These shares are still in the pool and have not yet been allotted. (Source: Economic Times)

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