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

To: Mohan Marette who wrote (10195)	12/21/1999 8:51:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

Silverline Industries bags FIPB approval for $125m ADR float Veeshal Bakshi (Fe) New Delhi, Dec 21: The Foreign Investment Promotion Board (FIPB) has cleared the $125 million American depository receipts (ADR) issue of software major Silverline Industries. FIPB sources said the company has indicated a price of around Rs 1200 per share in the ADR issue. The scrip closed at Rs 804 on Tuesday on the Bombay Stock Exchange. The Board has also cleared the revised proposal of Silverline Industries for allotment to 45 lakh shares to Silverline Holdings of USA in a swap-deal for acquisition of latter's equity holdings in Silverline Technologies. As per the earlier plan, Silverline Holdings of USA was to acquire 65 lakh shares of Silverline Industries in return for sale of its stake in Silverline Technologies. According to sources, the bullishness witnessed among the investors over the company's scrip in the past two months is expected to lead to pricing of ADR at a price equivalent to over Rs 1200 per share. The company is holding an extra-ordinary general meeting on January 12, 2000 to take shareholders approval for the revised ADR proposal and reduction in the size of the preferential allotment. The FIPB approval to the $125 million ADR issue and the swap-deal has cleared the decks for Silverline Industries to raise money in the international market to fund its overseas acquisition and other business plans. The reduction in the size of preferential allotment will benefit the company on several counts. First, the increase in equity size post-preferential allotment would be lesser than the earlier proposed. This will result in improved earnings per share. The reduction in the size of the preferential allotment to Silverline Holdings also provides the leverage to the company to go in for another preferential allotment in the near future. Sources said that talks are on for acquisition of information technology companies abroad. Such acquisitions are logical for the company as it has a large number of top international companies as clients and has offices in the US, Japan, Middle-East, UK and Hong Kong. Its client list includes JP Morgan, Merrill Lynch, First Data Corporation, AT&T Phillip Morris and Bankers Trust. Silverline recorded a turnover of Rs 87 crore in the first six months ended September 1999 with a net profit of Rs 31.56 crore. silverline.com