Vsnl Gdr Issue Likely To Be Postponed

The proposed global depository receipts (GDR) issue of Videsh Sanchar Nigam Ltd (VSNL) is likely to be postponed due to delays in the selection of co-lead managers to the issue.

The offering which was to hit international markets in February may be postponed to March or April, government sources said.

Videsh Sanchar Nigam had planned to undertake a series of pre-issue soft roadshows in mid-January.

The roadshows were aimed at getting an indication of the price at which investors would pick up the issue.

The sources said the company and the global coordinators to the issue Salomon Brothers, Klienwort Benson and Jardine Fleming are preparing the offer document to the issue.

The price of Rs 1,150 that was arrived at was based on preliminary calculations by analysts.

Currently, the Videsh Sanchar Nigam stock trades on domestic bourses at around Rs 950.

When the company tried to tap the global depository receipts market in 1994, it got a valuation of Rs 1,100.

The then communications minister Sukh Ram had insisted on a price of Rs 1,400 a share and the company had to abort the issue as it failed to attract commitments at the price.

The company stands to rake in between $330 million (Rs 1,155 crore) and $490 million (Rs 1,715 crore).

The core group on disinvestment had agreed to a disinvestment of 10-15 million shares which works out to a total offering of between 12.5 and 19 per cent of the companys paid-up capital base.

The global coordinators to the issue and the company brass will meet investors in Hong Kong, New York and London during the roadshows.

The coordinators were expected to close the books of the issue in early February.

A domestic float is also planned based on the feedback on price from investors.

Of the 19 per cent stock on offer, sources expect between five and seven per cent to be placed on the domestic market.

Some 21 merchant bankers have made presentations to VSNL brass and government officials on how they would handle the issue.