Barings not to sell stake in MphasiS

By agencies   |   Thursday, 25 August 2005, 07:00 Hrs
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BANGALORE: Barings India Investments Ltd, which holds a 35 percent stake in MphasiS BFL Ltd, has given up attempts to sell its stake in the company, citing "the merits of the proposals received and the prospects of the company."

Barings formally decided not to entertain any of the offers and informed the company about its decision: "Given our strong customer franchise and robust growth prospects, we would not like to entertain any of the offers. It is business as usual and the focus has to be to improve customer satisfaction, profitability and growth," Barings said in a communication to the company.

Sources say the stake sale in a services company such as MphasiS BFL would have to cater not only to investor expectations on realizations but also to management expectations - the stake sale effort fell through was because management expectations were not met. It is said that the uncertainty over the stake sale having ended, new client acquisitions will pick up considerably. The workforce sentiment, reported to be affected significantly, would also get a fillip.

For Barings, the stake sale to a suitable investor having fallen through, the secondary offering route through an ADR or GDR listing looks a definite option. Considering the positive growth in revenues and profits as well as the recent wins by the company, the prospects for a successful offering in the medium term are good, according to sources.

The private equity firm's attempt since May to sell its stake in the company had prompted potential buyers such as Temasek, Hinduja TMT, Carlyle and CapGemini to bid for the stake.

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