Business Editors/High-Tech Writers
CHENNAI, India--(BUSINESS WIRE)--July 3, 2000
Satyam Infoway Limited (Nasdaq:SIFY), India's premier Internet and e-commerce Company announced today that it had completed its acquisition of IndiaWorld Communications Pvt. Ltd. ('IndiaWorld') by acquiring the remaining 75.5% stake in IndiaWorld in a part cash and part stock deal.
In November 1999, SIFY acquired 24.5% stake in IndiaWorld for Rs 1,222 m ($28 m) and paid a deposit of Rs 513 m ($12 m) to acquire an option to buy the remaining 75.5% on paying a further Rs 3,254 m ($75 m) before 30 June 2000. SIFY completed the acquisition by paying Rs 2,154 m ($48 m at current rates) in cash and issuing 268,500 fresh equity shares for Rs 1,100 m ($25 m at current rates). SIFY's equity shares issued for this purpose are valued at Rs 4,097 per share ($91.75 per share; equivalent to the quote for four ADRs on the Nasdaq National Market on 23 June 2000). The equity shares issued to the former IndiaWorld stockholders are not listed in India and under present law are not convertible into ADRs.
The restructuring of the deal (whereby a third of the balance payable is issued in stock) is primarily a reflection of SIFY's association with Rajesh Jain, the promoter of IndiaWorld. Rajesh Jain has been closely involved in SIFY's business since November 1999 and is part of the team that is shaping SIFY's business and future. Rajesh plans to continue to be closely involved with SIFY and is now a member of SIFY's advisory board.
Mr. R. Ramaraj, CEO & Managing Director of SIFY said, "SIFY's portal www.satyamonline.com has grown from strength to strength since November 1999. The completion of this acquisition will reinforce SIFY's leadership position amongst Indian portals in advertising revenue. We are happy that Rajesh Jain will continue to be closely involved with us in future as well."
Mr. Rajesh Jain, Director of IndiaWorld said, "The completion of this transaction marks a beginning and not an end. Our acceptance of shares in SIFY instead of cash for part of the deal reflects the confidence in and commitment for SIFY's business and future. I look forward to being part of the team that is aspiring to build a strong business model, revenue and share holder value in SIFY. It is our mission to make a significant impact on the quality of the daily lives of a 100 million people through the medium of Internet."
