Financial Daily from THE HINDU group of publications
Sunday, Dec 07, 2003
Corporate - Mergers & Acquisitions
Info-Tech - Telecommunications
Reliance to pay $4 m more for FLAG Telecom
Mumbai , Dec. 5
FLAG Telecom has said that it has entered into a second amendment to the agreement and plan of amalgamation with Reliance Gateway that would increase the consideration of $207 million to about $211 million in cash.
This reflects a new price per share of $97.41, a statement on Flag Telecom's Web site said.
According to it, the largest shareholder of Flag Telecom, Harbert Distressed Investment Fund Ltd (Harbert), has entered into a voting agreement with Flag Telecom and Reliance Gateway by which Harbert has agreed to vote in favour of the amalgamation between Flag Telecom and Reliance Gateway.
Harbert is a direct holder of 37.1 per cent of Flag Telecom's outstanding common shares.
"In connection with the voting agreement, Reliance Gateway has agreed to pay Harbert $1 million in cash upon the consummation of the amalgamation," the statement said.
It quoted Mr Patrick Gallagher, Co-Chairman and CEO, Flag Telecom, as saying, "We continue to make good progress towards amalgamating Flag Telecom with Reliance Gateway. With the agreement with Harbert we have achieved a key milestone towards obtaining the requisite vote to approve the amalgamation."
When contacted, a spokesman for Reliance declined comment.
It was in mid-October that the Flag Telecom Group had announced it was entering into an Agreement and Plan of Amalgamation with Reliance Gateway Net Pvt Ltd, a wholly owned subsidiary of Reliance Infocomm Ltd, "pursuant to which Reliance Gateway will acquire 100 per cent of the company's common shares on a fully diluted basis for an aggregate purchase price of $207 million, reflecting a per share price of $95.61."
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