Tata Power, Tata Sons To Fund Vsnl Stake Buy

Tata Power and Tata Sons, the partners of Panatone Finvest, the special purpose vehicle (SPV) set up for acquiring a stake in Videsh Sanchar Nigam Ltd (VSNL), would fund the acquisition of the stake in the international telephone carrier.

Tata Steel and Tata Industries, too, are partners in the SPV. "Panatone would be funded by Tata Sons and Tata Power and through domestic borrowings. Tata Sons and Tata Power would provide the necessary financial assistance to Panatone in the form of equity/loans/guarantees to enable Panatone to meet its financial obligations under the open offer for acquiring the additional stake in VSNL," the group's merchant banker JM Morgan Stanley said in an advertisement on the open offer to VSNL shareholders.

The open offer to acquire an additional 20 per cent stake in VSNL would begin on April 10, it said.

Currently, the paid-up capital of Panatone is held by Tata Sons (50 per cent), Tata Power (40 per cent), Tata Steel (5 per cent) and Tata Industries (5 per cent).

The turnover and net profit of Panatone for the year ended March 31, 2001, were Rs 7.56 lakh and Rs 6.51 lakh, respectively. The share capital and reserves (net of miscellaneous expenditure to the extent not written off) of Panatone was Rs 1 crore as on March 31, 2001.

Panatone had an earnings per share of Rs 0.72 and a return on net worth of 6.5 per cent, while the book value per ordinary share was Rs 11.1.

Panatone is registered with the Reserve Bank of India to carry on the business of a non-banking financial institution.