Videsh Sanchar Nigam Limited (VSNL), state-owned telecom
carrier and the largest ISP in India, will be listed on the U.S. bourses by December, says Amitabh Kumar, chairman and managing director of the company.
“We have decided to list in the US stock exchanges by December, either on
NASDAQ or New York Stock Exchange (NYSE) or even both,” he revealed.
VSNL will be giving an option to its existing global depository receipt
(GDR) holders to convert their receipts to American depository receipts
(ADRs). In fact, the company is preparing for a Level-3 listing, which would
allow existing GDRs to be traded in the US markets without conversions.
The company is also currently in the process of modifying its accounting
procedures to meet the United States generally Accepted Accounting Practices
(GAAP) standards shortly.
Amitabh Kumar said that the financial projections for fiscal 1999-2000 were
very strong. “Net profit is likely to jump by 40 per cent over the previous
years figure of US$ 331 million, when the growth was about 38.5 per cent.”
he added that companies bottomline would improve considerably over the
previous year’s performance.
The domestic retail issue of one million shares would open for five days
between September 20 and 24, Kumar said. The issue would be priced at $17.85
(Rs 750) per share, garnering $178.5 million for the Government, which is
divesting its shares.
The issue price is at a huge discount to VSNL’s current market price of
around $27.5 per share on the Bombay Stock Exchange (BSE).
After the divestment, government stake in the company would come down to
52.8 per cent from 53.8 per cent. According to Kumar, the company received
the nod from Securities Exchanges Board of India (SEBI) last week and there
were no further clearances required for the offering.
For the year 1998-99, VSNL registered a strong operational and financial
performance. It had a rapid growth in traffic and increased the number of
value-added services in its portfolio.
However, the growth in the revenues is slightly lower than the growth in
traffic because of declining account rates. The silver lining was a
negligible increase in network cost despite the steep rise in total traffic.
In the last financial year, VSNL acquired a stake in New Skies Satellites NV
and augmented its investment in ICO Global Communications to $150 million.