Satyam divests its entire stake in Sify

HYDERABAD: IT services major Satyam Computer Services Ltd., has announced that it has divested its existing holding of 11,182,600 equity shares of Rs. 10 each in Sify Ltd., represented by ADSs, to Infinity Capital Ventures LP, a firm controlled by Silicon Valley entrepreneur, Mr.Raju Vegesna.

The sale was concluded at a price of $ 5.60 per ADS. The ADSs are priced at a premium by about 7.5 per cent over one month's daily average price as quoted on NASDAQ market, where Sify's ADSs are listed and traded.

With this, Satyam realized a gross consideration of about $ 62.62 million subject to transaction expenses and tax on capital gains. DSP Merrill Lynch was the advisor to Satyam on the sale of ADSs, while ICICI Securities arranged SIFY's sponsored ADS Program.

Satyam's divestiture is in line with its stated objective to emerge as pure play IT services and solutions Company.

With the consummation of this transaction, Satyam has ceased to be a shareholder of Sify, a company that it formed in December 1995, as a strategy to foray into allied businesses and to create long term business and investment value. As against its original investment of $five million in Sify in 1995, Satyam has received a total gross consideration of about $117 million till date.

Commenting on the move, B Ramalinga Raju, chairman of Satyam Computer Services Ltd said, “The move would enable Satyam to further focus on its core business and unlock the value of its investment. Leveraging Satyam's brand and committed support, Sify has emerged as a strong player in the data and network space in India.”