Two companies of the Mumbai-based Global group plan to place equity with investors abroad. While telecom equipment manufacturer Global Telesystems is firming up a $50-million (Rs 180 crore) global depository receipts (GDR) issue, Global Telecom Services an emerging player in the electronic commerce business intends to make a private placement of equity worth Rs 157 crore.
Both firms have put in applications before the Foreign Investment Promotion Board (FIPB) for government clearance. The applications were made over the last few weeks. The FIPB will take up the companies proposals soon, sources said. This will the first time the Global companies will be making overseas equity offerings.
Sources in Global Telesystems, however, declined to reveal the end-use of the GDR issue funds or the lead manager to the offering. They were also tightlipped about the private placement of Global Telecom Services equity.
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The latter has a tie-up with General Electric Information Services. Global Telesystems is a manufacturer of subscriber-end and transmission equipment, while its sister company Global Telecom Services provides value-added service solutions like data networking and electronic mail (E-mail) to mainly corporate customers. The closest the Rs 400-crore Global Telesystems has come to a overseas equity offering was in October last when it went in for a SFr 60 million (about $42 million or Rs 150 crore) foreign currency convertible bond issue. The issue was handled by Credit Suisse.
The issue proceeds is to be used for repayment of foreign exchange loans, capital expenses and corporate restructuring, a top finance executive said.
Global Telesystems had an equity base of Rs 19.6 crore as on March 31, 1996. Of this, group companies hold 48.18 per cent, promoters and directors 14.41 per cent, financial institutions 9.5 per cent and foreign institutional investors 0.08 per cent. Over 27 per cent was held by the public. The company approached the primary market in March 1993.
Global Telecom Services offers facilities like electronic data interchange (EDI), enhanced fax and electronic mail under the umbrella brand, Global Electronic Commerce Services. The company has been implementing EDI solutions for corporates in the country. The companys E-mail service, Global Mail, is one among several private data network licencees in the country.
The services company recently won a large EDI order from Baja Autos Pune plant. According to the company press release, the EDI project is one of the largest implemented in the country.
The project envisages wiring over 300 automobile component suppliers to the plant for exchange of delivery schedules, purchase orders and invoices.