The sale will bring an end to the government’s nearly 20-year-old involvement in Tata Communications, formerly known as Videsh Sanchar Nigam Ltd (VSNL).
The government will sell the 10% stake to Panatone Finvest immediately after the OFS, at the price determined through the offering, Tata Communications said in an exchange filing late on Friday.
Tata Communications’ shares closed 2.65% lower at Rs 1,289.75 Friday on the BSE. At that price, the government’s 26.12% stake is worth more than Rs 9,600 crore.
Panatone Finvest and Tata Sons hold 34.80% and 14.07%, respectively, in the company. The government, Panatone Finvest and Tata Sons are the promoters of the company. The government’s holding was a big hurdle in the company’s fundraising plans via equity, which meant it was dependent solely on debt funding to invest in business expansion.
VSNL was divested in 2002 by the government and the management control of the company was passed on to the strategic partner Panatone Finvest, a special purpose vehicle under the Tata Groups of Companies and a non-deposit-taking core investment arm of Tata Sons.
At that time, surplus land measuring 773.13 acres at five locations in four cities — Pune, Kolkata, New Delhi and Chennai — out of a total of 1230.13 acres held by VSNL, was kept out of the purview of the disinvestment deal. Panatone Finvest was to de-merge or hive off the land into a realty company, for which HPIL was created as a special purpose vehicle. That portion of the transaction has been completed.
Panatone Finvest also holds a more than 30% stake in Tata Sons and Tata Power.
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