To: Mohan Marette who wrote (606 ) 2/7/2000 1:34:00 AM From: Mohan Marette Read Replies (2) | Respond to
Satyam comp to divest equity (to a strategic investor) in Sify to repay debt Satyam Computer Services is planning to divest a part of its investment in Satyam Infoway to a strategic investor. This is a part of the company's overall strategy to de-risk business lowering the debt. Even if the company goes in for a mere 3-4% divestment, it would bring in enough money to repay a substantial part of its Rs 270 crore debt. This move is expected to help the company in reducing its debt as well as improving its earnings growth by 17% for the fiscal 2001. The issue is expected to come up before March end as the company would like to project the impact of reduced debt in its balance sheet as on March 3, 2000. As Sify is valued very attractively at Nasdaq, the company is expected to get a good price for its disinvestment. The current value of Sify at Nasdaq is, Rs 14,500 crore. Of this, Satyam's share is nearly Rs 8,700 crore. Nearly, 60% of the equity of Sify is held by Satyam. This holding can come down to 51% according to the undertaking given by it to SEC while filing the offer document. Vision Compass, another subsidary of Satyam has obtained orders from Caterpillar and Mitsubishi. It is also said to be holding negotiations with GE electric for orders worth, Rs 20 crore. A turnover of over Rs 200 crore is expected by the company from Vision Compass, in the calendar year 2000. In the nine-month period ending December 31, 1999, the company(Satyam Computers) is said to have shown a good performance. It posted a hike of 74% in its total income at Rs472.21 crore. The company's net profit has also grown by 73.34% to touch Rs 92.77 crore. expressindia.com
