Satyam Infoway

WASHINGTON, FEBRUARY 4: Satyam Infoway Ltd SIFY, an Indian Internet firm, filed on Thursday with US securities regulators to sell three ...

WASHINGTON, FEBRUARY 4: Satyam Infoway Ltd SIFY, an Indian Internet firm, filed on Thursday with US securities regulators to sell three million American Depository Shares.

The company said it would use the net proceeds, about 123.3 million, to acquire the remaining 75.5 per cent of outstanding shares of IndiaWorld Communications as well as to fund network infrastructure expansion and enhancement, advertising and general corporate purposes.

After the offering, there will be about 22.2 million ADSs outstanding in the company, according to the prospectus filed with the US Securities and Exchange Commission.

Each ADS of Satyam Infoway represents one-fourth of one equity share. The underwriters, Merrill Lynch amp; Co and Salomon Smith Barney, have been granted the option to purchase an extra 450,000 ADSs in the event of heavy demand.

Meanwhile, an investment proposal of software firm Satyam Computer Services Ltd cleared by the Government on Friday pertained to allotment of stock options to its foreign employees, a company official said on Friday. The industry ministry approved a clutch of proposals on Thursday including one by Satyam Computer worth Rs 72.8 million to increase its foreign equity to 40 per cent from 27.05 per cent.

quot;We had made an application to the government in November for permission to allot shares to foreign citizens who are our employees under the employee stock option scheme of the company,quot; vice-president finance V Srinivas said.

quot;I think the clearance pertains to this application,quot; he said, adding he was yet to receive official confirmation from the government. The Centre8217;s announcement had caused some confusion in the stock market on what the clearance pertained to.

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Srinivas said foreign employees of Indian firms could not own shares unless the Centre gave specific permission and this was treated as foreign direct investment FDI. He said the company had sought a higher blanket limit for the stock options to foreign citizens but actually proposed to issue only 0.1-0.2 per cent of Satyam8217;s equity capital now.

quot;For the entire stock option scheme we have set aside only five per cent of Satyam8217;s equity,quot; he said. Srinivas said of Satyam Computer8217;s total employee strength of almost 5,000, only 20 were foreigners.