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Govt okays Sterling Info's $500 million foreign issue

The Union cabinet approved on Tuesday unlisted telecoms firm Sterling Infotech Ltd's plans to raise $500 million in the overseas markets to lay an undersea cable to Guam, a territory of the United States.

The company has been allowed to raise the amount through the sale of American Depository Receipts/Global Depository receipts for the project, Parliamentary Affairs Minister Pramod Mahajan told reporters.

He said the firm is setting up an eight-fibre-pair fully protected undersea cable project from the southern city of Chennai to Guam, a territory of the United States.

Mahajan said the project seeks to meet the bandwidth requirement in South Asia including India and on completion it would link Chennai, Singapore, Indonesia and Guam using a ring network.

The minister said the approval stipulates that foreign equity would not exceed 49 per cent and management control at all times should remain with Indian shareholders.

"Any investment in broadcasting activity will require prior approval of the government and will be subject to sectoral guidelines," Mahajan added.

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