Search the Internet          Tips  Sites: Finance, Investment

Satyam Info mulls equity issue for expansion

Satyam Infoway, India's leading private sector Internet services company, plans to seek shareholder approval to issue up to four million equity shares for potential acquisitions and alliances.

"The company plans to expand its operations by making further investments in its various businesses, through expansion programs and strategic mergers and acquisitions in India and abroad," Satyam Infoway said in a filing with the Securities Exchange Commission of the United States.

The company's annual general meeting of shareholders will be held on August 2, and the approvals it is seeking are enabling resolutions which does not mean that it has firmed expansion plans.

The Nasdaq-listed firm said it planned to get permission to issue the shares for mergers and acquisitions or to raise further funds by placing shares privately, or through an international offering or by issuing other securities.

Satyam Infoway also plans to raise its authorised share capital to Rs 350 million from Rs 250 million.

Satyam Infoway managing director R Ramaraj said in June that several opportunities for acquisition of Internet service providers had come up and the company had considered them seriously, but the valuations were not realistic.

Satyam Infoway, is India's second largest Internet service provider after state-run Videsh Sanchar Nigam Ltd. Besides Internet access, it also provides Internet-related services to corporates and runs the portal Sify.com.

The Madras-based firm is majority-owned by Satyam Computer Services, India's fourth-largest software exporter.

Satyam Infoway said in June its cash burn rate was reducing progressively and it hoped to turn cash-flow positive within the next four to six quarters. In a reversal of trend, its January-March net loss had narrowed from the previous quarter. Its American depositary receipts closed unchanged at $2.55 on Wednesday.

Tell us what you think of this report