Sterling Infotech Allowed To Raise $500 Million Through Adr/Gdr

The Cabinet Committee on Economic Affairs (CCEA) today permitted C Sivasankaran-promoted Sterling Infotech to raise up to $500 million equity by issuing American Depository Receipts (ADRs) or Global Depository Receipts (GDRs) for financing an undersea cable project between Chennai and Guam.

The approval is, however, subject to the condition that the shares held by non-resident Indians (NRIs) would be transferred to resident Indians. Also, a fresh issue of shares to residents has to precede the ADR/GDR issue to conform with the 49 per cent foreign equity cap. The CCEA has further stipulated that the management control of the company will remain with the Indian shareholders. Also, any investment in broadcasting would require government clearance and will be subject to sectoral guidelines.

The company proposes to set up an eight fibre fully-protected undersea cable from Chennai to Guam, a US territory. The project will provide bandwidth to South Asia in general and India in particular. The system will link Chennai with Singapore, Indonesia and Guam through a ring network.

The CCEA also approved a proposal to augment the capacity of the 500 mega watt (MW) Gazuwaka HVDC back-to-back link at an estimated cost of Rs 769.25 crore. The augmentation will increase the inter-regional capacity between the eastern and the southern region.

It also cleared a scheme for setting up a Coastal Vessel Traffic Service for the Gulf of Kutch at a cost of Rs 165 crore, of which Rs 112.76 crore will be the foreign exchange component.

Under this project a network of radar, direction finders and hydrological and meteorological sensors would be set up along the coast for monitoring traffic in the region and guiding vessels to the destination, which would help in minimising the chances of collision. The scheme will become operational in four years.

The CCEA decided to extend the National Tuberculosis Control Programme, with assistance from the department for international development (DFID), for two years up to March 2004. The extension would cost the government Rs 560.71 crore and will increase the coverage to at least 700 million people.