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Tata group alters holding in VSNL SPV

Baburajan K & Arijit De

The Tata Group has changed the shareholding structure of the special purpose vehicle, Panatone Finvest, set up for the acquisition of Videsh Sanchar Nigam with Tata Steel, the group flagship, and Tata Industries, a group holding company, reducing their exposure to just a token presence.

Tata Steel and Tata Industries now hold 0.025 per cent stake each, instead of the earlier announced 5 per cent exposure to the SPV following a recapitalisation.

The alteration also follows Tata Steel's decision of staying away from making large investments in the telecom sector.

Tata Sons, the group's main holding company, have hiked its stake in the SPV by almost 10 per cent to 59.95 per cent following the infusion of additional capital.

Tata Power, which is making considerable investments into the group's telecom infrastructure initiative, will continue to hold 40 per cent in Panatone Finvest.

Tata group sources said: "The change in the holding structure in Panatone Finvest has been brought about keeping in view the business aspects of the various group companies, the synergies VSNL offers to them, and their respective future growth plans."

Panatone Finvest is making an open offer for a 20 per cent additional stake in VSNL.

On February 12, 2002, Panatone refinanced all the inter-company loans and a portion of the advances against equity from Tata Sons and Tata Power that it used to fund the acquisition of a 25 per cent stake in VSNL by issuing $165 million principal amount of zero coupon non-convertible debentures to Deutsche Bank.

The debentures were issued at a price equal to 90.62 per cent of its principal amount and the debentures will mature on February 21, 2003.

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