Satyam Computer Services Ltd on Wednesday announced approval of Sponsored American Depository Shares issue against the existing equity shares of the company.
A meeting of the board also decided that the size of the sponsored ADS issue shall not exceed 30 million equity shares (equivalent to 15 million ADSs), including green shoe option, if any, chairman of the company Ramalinga Raju said in a statement.
The issue would amount to $360 million based on the closing price of ADS on the New York Stock Exchange as of December 7. An extraordinary general meeting has been convened for this purpose on January seven, 2005, he said.
"Positive global trends towards offshoring have resulted in an enhanced interest in Indian IT companies. We believe the time is right to increase Satyam's float in the ADS market through sponsored ADS offering. This will bring us closer to achieving our objective of transitioning to a mainstream global IT service stock," Raju said.
Currently, Satyam's ADS constitutes 10.6 per cent of the issued capital. Post this issue ADS will represent 20 per cent of the issued capital.
Satyam's chief financial officer said: "The sponsored ADS offering is a significant step for Satyam in value creation by improving liquidity in the ADS market, enhancing branding of the company and augmenting ownership amongst global tech investors.
Each ADS of the company represents two existing fully paid-up equity shares of par value Rs 2 per share, the statement added.
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