BT to sell 9% final stake in TechM for Rs 1,000 cr

Last Updated: Fri, Dec 07, 2012 07:40 hrs

pLondon-headquartered BT Group formerly British Telecom plans to raise about Rs 1000 crore by selling its remaining stake of 909 per cent in Tech Mahindra Ltd a joint venture between BT and Mahindra & Mahindra M&M formed in 1986 The transaction will be done through the stock market via block dealsppBT &mdash which held 424 per cent stake in the joint venture initially &mdash has been consistently reducing its stake to focus on its core businesses back home The sale of the last tranche of shares to institutional investors is being done by Credit Suisse The share price of Tech Mahindra closed at Rs 88235 on Thursday and the stake will be sold at a 7-8 percent discount to market price to attract investors Tech Mahindra stock has shot up 54 per cent in the year-to-date versus a 26 per cent gain in the BSE Sensex and a 1 per cent fall in BSE IT Index giving a good opportunity to the BT Group to exit the company at an attractive priceppWhen contacted a Tech Mahindra spokesperson declined to comment on the news An e-mail sent to the BT Group did not elicit any responseppAlthough both the companies have maintained that the stake sale will not impact Tech Mahindra&rsquos business proposition with BT the latter&rsquos share in the revenue contribution has been coming down Over the past few quarters Tech Mahindra has reported that revenue from BT has been consistently falling For the quarter ended September 30 2012 BT&rsquos business to Tech Mahindra was down by 36 per centppEarlier the BT Group had stated its intention to exit the joint venture After its holding in Tech Mahindra shrank following the latter&rsquos IPO BT initiated the stake sale process by selling 55 per cent stake to M&M in December 2010 for Rs 450 crore at Rs 6536 per share With this transaction M&M waived off its right of first refusal on the rest of BT&rsquos stake paving the way for BT to sell more stake to other investors and raise the much-needed funds to meet its huge pension liabilities back homeppIn August 2012 BT sold another tranche of 141 per cent or about 179 million shares in Tech Mahindra to institutional investors for a total cash proceeds of Rs 1395 crore at Rs 77773 per share Thereafter BT in a statement had acknowledged that further sales would be considered M&M now owns close to 4749 per cent stake in the company and has already announced that Tech Mahindra will be merged with its other acquisition Satyam Computers Ltdpp&ldquoBT overall has been wanting to bring down its IT spends Within that we have managed to grow our share Almost 65 per cent of BTs IT work is managed by Tech Mahindra whereas 30-33 per cent is with global vendors With BT revenues of 400-350 million it is the single largest account for us and biggest when compared to others&rdquo Vineet Nayyar executive vice-chairman of Tech Mahindra had said after the company announced its September resultsp

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