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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (9331)	11/4/1999 1:41:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

G E Capitals acquiring 10.7% stake in Infotech Enterprises Ltd infoteck.stph.net (Friday, November 5, 1999-Business Standard) James Mathew & Surajeet Das Gupta in New Delhi G E Capital Corporation is acquiring a 10.7 per cent stake in domestic Internet service provider (ISP) major Infotech Enterprises Ltd. GE Caps will acquire the equity through the preferential route. According to sources, two overseas funds -- Walden International Investment Group and Callaghan Partners Corporation -- are also picking up stakes in the firm. While Walden will pick up 1.84 per cent, Callaghan will acquire 1.47 per cent of the equity in the expanded capital. Sources said Infotech will make a preferential allotment of optionally convertible debentures (OCDs) to GE Caps and the two foreign funds with each OCD being convertible to one equity share of Infotech. The OCDs will be issued at a face value of $8.14 (Rs 350). Currently, Infotech has a foreign equity holding of about 12 per cent, including a one per cent stake of Analytical Surveys Inc, US, which it acquired in lieu of the sale consideration of its wholly-owned Indian subsidiary, Cartographic Services (P) Ltd, to Infotech. The foreign equity holding in the company will go up to about 26 per cent when the GE Caps, Walden and Callaghan investments are completed. Infotech also has got government approval for receiving about four per cent foreign equity in lieu of its recent acquisition of an UK firm, Data View Solution Ltd. Sources said GE Caps will be issued 7,50,714 OCDs, which on conversion will account for 10.7 per cent stake of Infotech. The acquisition will cost GE Caps $6.11 million. The MNC will make the payments in two parts. While it is to make an upfront payment of $3.05 million as full payment for 3,75,357 OCDs, which will be converted into equal number of shares any time during the 18 months from the date of investments. In the second tranche, GE Caps will pay $0.76 million, which is 25 per cent of the face value of 3,75,357 OCDs. The conversion of this into equity, however, will be linked to performance in terms of business generated by GE Caps for Infotech. The OCDs will have a put option. According to the agreement, if GE Caps decides to exercise the put option, Infotech will have to make a payment of $3.82 million along with interest of three year Libor plus one per cent at the end of 18 months from the date of investments.