Bloomberg update (2)-add MD's comments and more details.
Satyam Infoway to Offer 3 ADRs More for Each Held (Update2)
Satyam Infoway to Offer 3 ADRs More for Each Held Update2) (Adds managing director's comments in paragraph 5 and more details.)
Mumbai, Dec. 20 (Bloomberg) -- Satyam Infoway Ltd., the second-largest Indian Internet service provider, said it will offer three free American depositary receipts or ADRs to share holders for each held, in a move boost the stock's liquidity.
Shareholders of Satyam Infoway, which began trading on the Nasdaq Exchange in October, will as on Jan. 5, receive three additional ADRs for every one they hold.
``The company's equity shares, which are not publicly traded, will not be split. Consequently, four ADR's will represent one underlying equity share,' the company said in a statement. Satyam Infoway is a subsidiary of Satyam Computer Services Ltd.
Satyam Infoway, which last month, bought a 24.5 percent stake for 1.22 billion rupees ($28 million) in IndiaWorld Communications Pvt. Ltd., that runs a web site for Indians overseas, has also asked the government to permit the company sell more shares on the Nasdaq exchange to help Satyam pay for the rest of the stake.
``Its not the time to look at returns, its investment time,' said R. Ramaraj, managing director at Satyam Infoway.
Additional ADRs
Satyam Infoway hopes to sell up to $115 million worth of shares in the U.S. to help fund the purchase.
``Satyam Computer owns 59 percent of Satyam Infoway's equity, so it would be important to note by how much it dilutes its equity,' said Jayesh Parekh, an analyst with SMIFS Securities. ``If Satyam Computer sells more than 8 percent it would lose control of the Satyam Infoway.'
Internet subscribers of Satyam Infoway, which helps the Indira Gandhi National Open University teach its students who are spread all over the country on the Internet, said it has 100,000 connections till Nov. 11. The company aims for more than 70 percent growth this fiscal year as more Indians surf the Internet.
Started last year as unit of Satyam Computer Services Ltd., one of India's most profitable computer software companies, Infoway is India's first wholly owned Internet company without government ties.
Satyam Infoway's second-quarter loss widened 74 percent to 77 million rupees even as sales rose seven times to 127.4 million rupees.
Satyam's ADR's have risen by eight times since they began trading on the Nasdaq exchange. |
