Intelsat sale: VSNL to get Rs 786 cr

The Tatas-owned Videsh Sanchar Nigam Ltd, the Internet gateway and service provider, is likely to receive around Rs 786 crore ($169 million) from the sale of its 5.42 per cent stake in US satellite company, Intelsat Ltd.

The sale would result in VSNL receiving capital gains of over Rs 530 crore (Rs 5.3 billion), as Intelsat was acquired by VSNL in 2001 for Rs 254 crore (Rs 2.54 billion), VSNL sources said on Tuesday.

The satellite company is being paid $8.75 a share and the Tata company holds around nine million shares in Intelsat, they said. The sale of Intelsat is expected to be completed by December-end, they added.

The Bermuda-based satellite company is being acquired by a group of private investors for $5 billion in cash and assumption of debt. However, VSNL sources said that they are

yet to receive an official communication regarding the sale of Intelsat.

VSNL was a founder member of Intelsat, a consortium formed in 1964 that owns and operates satellite communication systems. The consortium was later privatised on July 18, 2001, and VSNL was allotted a shareholding of about 5.42 per cent.

Tata company in its director's report had said VSNL would "continue to review the possibility of offering its own shares for sale accordingly at the appropriate time."

Intelsat acquisition, which is subject to necessary approvals, is slated to be taken over by a conglomerate of four private companies: Apax Partners, Apollo Management, Madison Dearborn partners and Permira.

The buyers would pay Intelsat's 200 shareholders $18.75 per share, or $3 billion in cash and assume the company's $2 billion in debt.