Fii Bid To Get On To Vsnl Bandwagon

VSNL has reportedly recommended Kleinwort Benson, Salomon Brothers and Jardine Fleming to lead manage the issue, which is likely to be around $700-800 million.

Sources say political pressure is mounting on communications minister Beni Prasad Verma and the core group to accommodate other investment bankers too.

Lehman Brothers has also made a pitch for the account. A senior executive of Lehman Brothers had earlier told Business Standard that it is pitching for the mandate as it has international experience specifically handling telecom issues. One of key Lehman Brothers officials handling India is Ajeya Singh, son of V P Singh.

Investment bankers have made a beeline for the Videsh Sanchar Nigam Ltd issue for the sheer size of it. The commission for handling such issues is normally three per cent of the issue amount.

 

In this case, it would work out to an income of about Rs 85 crore for the merchant banker.

Lehman was among 15 aspirants which made presentations to Videsh Sanchar Nigam Ltd

. Ajeya Singh is understood to have been spending time in India in the past few months in connection with the presentations. He is currently in New Delhi.

Other banking houses which participated in the `beauty contest' included Morgan Stanley, BZW, CS First Boston, Merrill Lynch, SC Warburg, James Capel and Daiwa.

However, government sources feel that it is unlikely that any other issue manager will be included at such a late stage. At best other investment banks may be included as syndicators to the issue.

The three (investment banks) were shortlisted after an evaluation process based on eight parameters, including the commission quoted, valuations, experience, placement reach, credibility, etc. The three were among those with the lowest commission quotes, a source said.