Us Firm To Pick Up 5% In Satyam Computer

ESL Incorporated, the US-based subsidiary of TRW Inc, is investing $50 million in Satyam Computer. TRW is picking up 5 per cent equity stake in Satyam through issue of warrants by the Indian company. ESL will subscribe to about 62,402 warrants of Satyam which will be converted into equity shares in the ratio of one warrant into one equity shares or any number of equity shares depending upon the share split option to be exercised by Satyam Computer. The issue of the proposed warrants will offer ESL the right to acquire shares from the BSE at a price of Rs 3,580 per share as per Sebi guidelines. This will happen following Satyam's proposed share split which is expected to be in the ratio of 1:5. ESL will bring $500,000 upfront to subscribe to the convertible warrants. The proposed issue of warrants will represent about 5 per cent of the paid-up capital of Satyam Computer. The Hyderabad-based infotech major is also considering acquisitions and strategic investments in companies which are important to the company's businesses as an important growth strategy in India. However, the company is yet to allocate specific funds for the project. Satyam Computer is also raising $310 million through the issue American Depository Shares. In addition to this the company will also offer ADS linked stock options for $25 million and ADS to its customers and strategic partners worth $ 50 million. The proceeds of the ADS issue will be utilised by the company to fund acquisitions in India and abroad. Besides, the company will also use the earnings from the ADS to invest in joint ventures, strategic partnerships, incubation ventures and to fund future strategic investments. Besides, there are also plans by the company to use the ADS proceeds to fund the expansion of its existing facilities in Bangalore, Bhubaneswar, Chen -nai, Mangalore and Pune. The company has approached the Secretariat of Industry Approvals for the approval as the size of the issue of ADS exceeds the automatic approval limit of Rs 600 crore. The company's Annual General Meeting held on May 28 has already approved the company's plans for the ADS. Satyam owns about 56 per cent in Satyam Infoway, a leading Indian Internet Service Provider, which is listed in the Nasdaq. In the fiscal 2000, the Satyam Computer Services has recorded revenues of $155.67 million. and net profits of $ 31. 12 million, which represents a compunded annual growth and profit after taxation growth of 82.4 per cent and 83.5 per cent respectively. The company has about seven offsite offsite software development centers and about 200 corporations as its clients, with about 75 per cent of the company's offsore development revenues coming from the US markets.. IT currently employs about 5000 professionals operating out of offices and other development centers around the world. Currently the foreign holding in the company is 29 per cent, mostly held by fireign institutional investors and has the arrpoval up to 40 per cent for investments by foreign institutional investors. The company has also decided to off load about 3 per cent equity in Satyam Infoway to raise funds During the fiscal 2000 the company's top ten clients accounted for about 54.7 of its revenues and two largest clients accounted for about 27.5 per cent of its revenues.