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MTNL GDR announced

The offer comprises 40 million equity shares being divested by the Indian government, the company's largest shareholder and 20 million new equity shares being issued by the company.

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In relation to an over-allotment 'greenshoe' option, a further 10 million new shares may be issued a press release in Bombay said yesterday.

The government's present shareholding of about 66 per cent may be reduced to approximately 56 per cent of the expanded equity after the issue.

Proceeds to the company will be used to partially fund the company's Rs 120 billion ($3.25 billion) capital expenditure programme covering the next five years.

This includes setting up new local switching and access lines, expansion of transmission facilities, improvement of network and infrastructure facilities and delivery of further value-added services.

Application will be made for the GDRs to be listed on the official list of the London Stock Exchange and to be quoted on 'SEAQ International' and on the 'portal' market with clearing through 'Euroclear', 'Cedal' and 'DTC'.

The joint global coordinators and book-runners to the GDR offer are Goldman Sachs (Asia) LLC, HSBC Investment Banking and Merrill Lynch Far East Limited.

Announcing the GDR issue launch, A V Gokak, chairman, Telecom Commission, said "The telecommunications sector in India is growing rapidly and is at the forefront of the government's focus on infrastructure development and liberalisation. MTNL is one of the India's leading companies and has shown impressive growth over the past few years. The company has a substantial investment programme and has defined its strategies to continue rapid growth in the future."

S Rajagopalan, chairman and managing director, MTNL said, "We believe that Delhi and Bombay represent the two most affluent and commercially active centres in India and our line penetration rates, though much higher than penetration rates for India as a whole, leave huge scope for growth."

UNI

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