Govt To Sell 16.12% Stake In Tata Comm Through OFS, Rest To Tata Sons Arm

The government will sell its entire stake in Tata Communications through an offer for sale and the rest to Tata Son's investment arm Panatone Finvest Ltd, according to a regulatory filing.

Currently, the government holds 26.12 per cent stake in Tata Communications, Panatone Finvest Ltd 34.8 per cent and Tata Sons 14.07 per cent, respectively.

"Tata Communications Ltd has today (Friday) signed an amendment agreement between the President of India, Panatone Finvest Ltd, Tata Sons Private Ltd and the company for sale of the entire shareholding in the company by the Government of India," Tata Communications Ltd (TCL) said in the BSE filing on Friday.

The government holds 7,44.46,885 equity shares of TCL, which, at last closing price of Rs 1,289.75 per unit, stands at a value of over Rs 9,601 crore.

"As an initial step, the government will sell up to 4,59,46,885 equity shares forming 16.12 per cent equity shareholding of the company through an offer-for-sale (OFS) through the stock exchange mechanism.

"Immediately after the OFS, the government shall sell the remaining equity shares held by it in the company to Panatone," the filing said.

The price of equity shares to be sold to Panatone will be arrived at by dividing aggregate of the product of the number of equity shares sold under the OFS and the corresponding price at which such equity share is sold, by the total number of equity shares sold, according to the filing.

"Upon completion of aforesaid transactions, the government will cease to be a shareholder of the company," the filing said.

It added that the government, Panatone, Tata Sons and Tata Comm have entered into an amendment agreement with regard to amending the shareholders' agreement dated February 13, 2002.

The pact was entered into at the time of disinvestment by the government in 2002 between inter alia, the government and Panatone and to record the terms and conditions for transfer of the agreed percentage of shares of Tata Commmunications held by the government to Panatone.

The government established VSNL in 1986 and divested its 25 per cent stake in 2002 along with transfer of management control to Panatone Finvest Ltd, the strategic partner. Subsequent to the strategic disinvestment, the name of the company was changed to Tata Communications Ltd (TCL).

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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