Sify raises $150m through 2nd ADR

BANGALORE: Satyam Infoway, has raised $150 million by way of a second ADR

offer, at $80 per share. The ADR issue, which had a greenshoe option of $30m,

received an overwhelming response and the roadshow for the issue is said to have

generated demand worth $2 billion. It may be recalled that, the company had

floated its first round of ADR in October 1999 for an issue price of $18 a

share.

The pricing of shares at $80 each represents a 9.25 per cent premium to

SIFY’s seven-day average price, DSP Merrill Lynch vice president Amit Chandra,

book-runner to the issue, said. At $80 each an ADS, the market capitalization of

SIFY stands at $7.1billion. SIFY ADS gained 78 per cent since the middle of last

week when the roadshows to the issue commenced.

SIFY issued 1.6 million American Depository Shares (ADS). The company had

granted the book-runner an over allotment option of 2,50,000 ADS. Each ADS

represents one fourth of one equity share of Satyam Infoway and the current offering

has resulted in two per cent equity dilution.

The company, in its submission with the Securities and Exchange Commission

(SEC), had said it would use the net proceeds to acquire the remaining 75.5 per

cent of IndiaWorld Communications and to fund network expansion, advertising and

general corporate purposes. It had, in November 99, acquired a 24.5 per cent

interest in IndiaWorld with an option to acquire the balance of the shares by

September 30, 99.

Mr Chandra said that apart from the huge retail and institutional interest,

the issue was also subscribed by specialist technology funds.

SIFY’s total revenues for the quarter ended December 31, 1999 stood at Rs

18.46 crore ($4.2 m) as compared to Rs 2.2 crore in the corresponding period of

the previous year, indicating a jump of 839 per cent. Revenues for the nine

months ended December 31, 1999 were Rs 39.2 crore ($9 m) as compared to Rs 5.74

crore for the nine months ended December 31, 1998 - a jump of 685 per cent.

The net loss for the period stood at Rs 7.3 crore ($1.7m) as compared to Rs

5.6 crore in the corresponding period of the previous year. The net loss for the

quarter ended December 31, 1999 was Rs 3.55 per equity share compared to Rs

12.45 per equity share for the quarter ended December 31, 1998.