Advertisment

Pentafour's $60m ADR issue cleared

author-image
CIOL Bureau
Updated On
New Update

BANGALORE, September 8: Multimedia major Pentafour Software and Exports

has been given "in-principle" permission by the finance ministry

to mop up $60 million from the American equity market during the current

financial year.

Advertisment

The finance ministry gave a nod to the equity float of the company

through American depository receipts or global depository receipts last

week.

Pentafour is the third major information technology giant after Infosys

and Satyam to have been given the government clearance to mop up funds

from the overseas market for their expansion programme.

Pentafour's annual general meeting had resolved in June this year to

raise equity through ADR along with the option of hitting the GDR market

during 1999-2000 and the company had subsequently sought permission from

the finance ministry.

Advertisment

With the clearance from the finance ministry, Pentafour can now

approach the Foreign Investment Promotion Board (FIPB) and the US

Securities Exchange Commission (SEC) for clearance.

Finance ministry sources said Pentafour would not have any problem in

floating the equity in American exchanges as it has been following

Generally Accepted Accounting Practices (GAAP) set by the US market

regulator. Company officials said Pentafour would like to list on the

Nasdaq considering the number of high-profile technologies companies being

traded at the bourse.

Pentafour officials said the company planned to spend the proceeds from

the float for overseas acquisitions, mergers and joint ventures during the

current fiscal.

Pentafour had come out with two GDR floats, one in December 1996

offering 3.90 million shares at $13 per receipt and in September 1997

offering 3.53 million shares for a price of $13.16 per GDR.

Promoters hold 16 per cent stake in the software firm, while domestic

financial institutions and mutual funds control 15 per cent stake.

Overseas corporate bodies hold five per cent of the equity. FIIs hold 20

per cent and GDR holding represents another 19 per cent. The Indian public

holds the largest number of shares with 25 per cent.

tech-news