Government to exit Tata Communications; may garner around Rs 8,000 crore

NEW DELHI: Government will sell the residual 26.12% stake in Tata Communications Ltd (TCL) to exit the erstwhile Videsh Sanchar Nigam Ltd, partly through offer for sale in the stock market and selling the rest to the Tatas to garner around ₹8000 crore as part of its disinvestment receipts in the current financial year ending 31 March.
“Part of the stake will be sold through OFS and on the discovered price, rest of the stake will be sold to the Tatas. Though how much exactly will be sold through OFS has not been decided yet, the Cabinet Committee on Economic Affairs (CCEA) has approved selling up to 16% stake through OFS and remaining to the Tatas,” a finance ministry official said on condition of anonymity.
DIPAM has invited bids from merchant bankers-cum-selling brokers and has set 3 February as the last date for bid submission while bids will be opened on 4 February. The transaction is to be completed by 20 March.
VSNL, a Central Public Sector Enterprise was privatized in 2002 by divesting 25% shareholding along with transfer of management control to Panatone Finvest Limited, the Strategic Partner (SP), Subsequent to the strategic disinvestment, the name of the Company was changed to Tata Communications Limited (TCL).
“The SP (Tatas) had given an open offer at the time of strategic disinvestment in 2002; the present transaction including transfer of shares to the promoters namely the SP, is to be structured in a manner that it does not trigger open offer again. The appointed MB (merchant banker) would advise the government in this regard and also on any exemption from SEBI is required in the matter,” DIPAM said in the bid document.

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