Chennai: Satyam Infoway Ltd has acquired IndiaWorld Communications totally as on June 30, by making a part cash payment and a stock deal with IndiaWorld promoter Rajesh Jain. Satyam had paid $40 million to Jain in November, which included a caution deposit of $12 million. This amounted to Satyam acquiring 24.5 per cent. Satyam had to pay up the remaining $115 million by June 30, 2000.It also had an option of rolling over the payment till September, for an interest outgo of 16 per cent. Satyam Infoway paid Rs 215.4 crore ($48 million in cash at the current rates) and the remaining was given as equity to Jain. This translates to about 265,800 shares of Sify in Indian stock. The stock was valued at 4 ADRs for one share as it stood last Friday, without discount. (One ADR had an approx value of $22.8 on the Nasdaq).
Jain's holding translates to less than one per cent in Satyam Infoway, which has a total of 23 million shares. CFO TR Santhanakrishnan says, in November 1999, only an all-cash deal was envisaged. This was because Rajesh Jain was then perceived only as a financial investor, who would have monetised stocks if that option had been given then.
However for the last six months, Jain had been associated very closely with Satyam Infoway, spearheading technology and had participated in the working of the company. Jain wanted to become a strategic investor and is now a part of the advisory board.
Satyam Infoway now has spare cash to the tune of Rs 110 crore which it saved in lieu of cash outgo to Jain.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.