CS First Boston, BancAm, OCBs buy 25 per cent DSQ Software pie
dsqsoft.com
(BS-Saturday, December 25, 1999)
Baiju Kalesh in Mumbai
Credit Suisse First Boston, BancAmerica Equity Partners and some overseas corporate bodies yesterday picked up 25 per cent of the DSQ Software stake by subscribing to 75 per cent of the new shares issued by the company.
The deal was finalised yesterday in Chennai, sources familiar with the deal said.
The scrip took a beating on the Bombay Stock Exchange yesterday with prices crashing by Rs 14 to Rs 832.
CSFB has joined the race to subscribe to the shares after the speculation that BancAmerica Equity Partners would be picking up the entire lot of shares, along with some overseas corporate bodies (OCBs).
The two foreign financial institutions had subscribed to the one crore shares issued by the company. With the new development, promoter Dinesh Dalmia's holding will come down to around 20 per cent from the previous 30 per cent.
While Dinesh Dalmia will hold 20 per cent, BancAmerica Equity Partners, CSFB and OCBs will together hold around 25 per cent of the equity capital. The rest will be held by financial institutions and the public, sources said.
Earlier, the company had decided to issue shares at Rs 250, which was later increased by Rs 25. Sources said that the delay in receiving FIPB approval has resulted in further delay in signing the deal, sources said.
Sources said that the company recently received FIPB approval for foreign investors to pick up equity in the company.
The Rs 275 crore will be used to retire debt, which is estimated at around Rs 175 crore. The rest will be used for capital expenditure and acquisitions, sources said.
The company has decided to go in for a one-time payment of its entire debt: both, short-term and long-term. The board vacancies arising out of the clearance of debt will be offered to strategic investors.
Sources said BancAmerica Equity Partners, CSFB and the largest OCB investor will receive a seat each on the board.
After the retirement of the debts, DSQ Software will become a debt-free company, sources said.
Earlier, Dinesh Dalmia had said that he was in negotiations with a group of strategic investors for placing 30 per cent of his equity. The company also received shareholders' approval for placing one crore shares with strategic investors at its extra-ordinary general meeting on November 12.
The company had also sought approval for increasing the authorised share capital to Rs 60 crore, consisting of equity share capital of Rs 35 crore and redeemable preference capital of Rs 25 crore. |
