Nortel invests $10 m in Sasken stakes

MUMBAI: Nortel has invested $10 million in Sasken Communication for an undisclosed equity stake in the company's fully diluted equity. Sasken plans to use this investment to fuel its growth through acquisitions.






Though Nortel would not have controlling power stake in Sasken, both the companies have signed an amendment to an existing services agreement under which they will continue to work together to develop new software and deploy Nortel networking solutions. The overall equity of Sasken is 16.8 million shares and the other major investor in the company is Intel capital which invested around $three million in 1999 in the company.





Sasken chairman and CEO Rajiv Mody said, "Nortel has been an important customer of Sasken for the past 15 years. This investment is a re-affirmation of Nortel's long and close relationship with Sasken."





"We are pleased and excited about the investment announcement. A close relationship with a leading local supplier like Sasken will provide further leverage for Nortel to be competitive in this market. We would use this investment to acquire companies in communication space that will complement our business processes. For the overseas acquisition, it would go for the company that has financial prudence and cultural integration."





Nortel would get technological assistance from Sasken for its domestic as well as overseas projects. Nortel has bagged the BSNL project for the supply of seven million lines, the first phase of which is expected to be completed by the end of this year. Sasken is providing customer support and technological assistance to Nortel for the project. Similarly, it is also assisting Nortel in several other projects that include CDMA and others.





Sasken generated revenue to the tune of $36.4 million in 2003-04 and has employee base of 2,300 people, of which 1,700 are working on wireless projects.