BANGALORE: Wipro has announced that its board of directors had passed a
resolution to raise equity in the overseas market in the form of either American
Depository Receipts (ADRs) or Global Depository Receipts (GDRs). Wipro is also
seeking blanket approval from the Reserve Bank of India for acquiring companies
overseas.
It is seeking approval for spending up to $500 million on acquisitions, to be
funded through cash or stock swaps, before the ADR issue and it also seeking
clearances for spending up to $10 billion using funds acquired through the ADR
issue and/or a combination of cash/stock swaps. A press statement said,
"The quantum of the issue is yet to be firmed up, but is not likely to
exceed $500 million.’’
Wipro has called an extra-ordinary general meeting on April 26 to seek
shareholders’ approval for this move. Senior Wipro officials stressed that the
announcement was only "a declaration of intent and that no specifics had
been decided about the issue size or the time frame in which this will take
place.’’ However, it’s expected that the ADR/GDR issue may go through in
the next 6-12 months. Morgan Stanley is likely to be lead manager for the issue.
The company also resolved to issue ADR/GDR linked stock options to employees,
subsidiaries and associates of the company up to a limit of $150m. The company
is expected to go to Nasdaq, the preferred destination of technology companies
for listing.