Satyam exits Sify; sells stake for $62.62mn

Satyam Computer Services has divested its entire stake in Sify by selling 1,11,82,600 equity shares of Rs 10 each, represened by Amercian Depositary Shares (ADSs), for $62.62 million to Infinity Capital Ventures LP.

"The move would enable Satyam to focus on its core business and unlock value of investments. Sify has emerged as a strong player in the data and network space in India. I am sure Sify's management team will continue to scale up Sify's growth with the active support of the new investor," B Ramalinga Raju, chairman of Satyam Computer Services, said.

"As against an original investment of $5 millon in Sify in 1995, the company has received a total gross consideration of about $117 million till date - making it a highly successful and value creating investment for shareholders," the release added.

The deal, representing 31.61% of Sify's equity, has been concluded at $5.60 per share to be paid in cash by Infinity, a company controlled by Silicon Valley entrpreneur Raju Vegesna.

In an update released by Satyam to the BSE today, "In a separate transaction, Infinity Capital also agreed to purchase, directly from Sify, approximately 6.7 million, newly-issued shares at a purchase price of Rs 256.09 (about $5.60) per share in cash. The closing of the direct purchase from Sify, representing an additional investment of Rs 172.10 crore (about $37 million at an exchange rate of Rs 45.73), is expected to occur in late 2005 upon receipt of stockholder and regulatory approvals."

The total position will represent approximately a 40% ownership interest in Sify for Infinity, the update added.