Mumbai, Feb 4: Satyam Infoway has filed prospectus for its second ADR float of $130 million with the Securities and Exchange Commission of the US. The second float is likely to be priced close to the market price of its ADRs listed on the Nasdaq. On Thursday, the ADRs were up by $1 to close at $48. The company will be issuing three million ADRs.The proceeds of the issue will be utilised to finance the second leg of the acquisition of Indiaworld Communication which it acquired at the cost of $115 million and also infrastructure expansion. The issue process is expected to be completed by February-end.
Satyam had acquired 24.5 per cent of IndiaWorld at a cost of $28 million, retaining the option to buy the balance 75.5 per cent stake before the end of September 2000. It had paid a non-refundable deposit of $12 million. The $40 million deal was paid in cash out of the proceeds of its first ADR issue as part of the first leg of the transaction.
Satyam requires another $75 million or Rs 325 crore to complete the financing of the acquisition. This would mean that the company would be left with about $55 million to meet the requirement of strengthening its infrastructure and possibly some more acquisitions.
Satyam's first ADR was priced at $18 a piece, which fetched the company about $80 million. The ADRs are currently trading at a substantial premium to the offer price.
The acquisition of Indiaworld itself powered the market cap of Satyam Infoway, making it attractive for the company to tap the ADR market once again.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.