Satyam's new ADS sized at $360m

HYDERABAD: Satyam Computer Services Ltd has announced that the Board of Directors of the company in its meeting has approved the proposal of Sponsored American Depository Shares (ADS) issue against existing equity shares of the company.

The board decided that the size of the sponsored ADS issue should not exceed 30 million equity shares, (equivalent to 15 million ADSs) including green shoe option, if any. This issue would amount to $360 million based on the closing price of ADS on NYSE as of December 7, 2004. An Extraordinary General Meeting has been convened for this purpose on January 7, 2005.

Speaking on the occasion, Satyam Chairman, Ramalinga Raju said, "Positive global trends towards offshoring have resulted in an enhanced interest in Indian IT companies. We believe the time is right to increase Satyam's float in the ADS market through Sponsored ADS offering. This will bring us closer to achieving our objective of transitioning to a mainstream global IT services stock."

Presently, Satyam's ADS constitutes 10.6 percent of the issued capital, post this issue ADS will represent 20 percent of the issued capital. Satyam CFO Srinivas Vadlamani commented, "The Sponsored ADS offering is a significant step for Satyam in value creation by improving liquidity in the ADS market, enhancing branding of the company and augmenting ownership amongst global tech investors."

Each ADS of the company represents two existing fully paid-up equity shares of par value Rs two per share.