Leasing firm admits selling Satyam’s pledged shares

BANGALORE - Infrastructure Leasing and Financial Services (IL&FS) Ltd has sold over 24.5 million equity shares of besieged Satyam Computer Services that were pledged with debenture holders lenders, the leading non-banking financial firm said Tuesday.

In a letter to the Indian stock exchanges late Monday, the leading firm said in all 24,520,500 equity shares of the Hyderabad-based IT bellwether were sold over a fortnight (between Dec 23 and Jan 5) in the secondary market on behalf of Bangar Agro Ltd, Amravati Greenfields Ltd, Narayandri Greenfields and Harangi Agro Farms Ltd.

The sold shares represent 3.64 of Satyam’s total equity.

The pledged shares were in the form of non-convertible debentures (NCDs) with holders and lenders - DSP Merrill Lynch Ltd, DSP Blackrock, Deutsche Bank, HDFC Mutual Fund and us,’ IL&FS said in the letter.

Though the trustee company gave details of the number of shares sold and on which date, it did not disclose the price at which the shares were sold or the transacted amount.

The latest disclosure of Satyam’s shares being sold by institutional holders comes in the wake of its company secretary G. Jayaraman informing the stock exchanges Jan 2 that the promoters’ holding had reduced to 5.13 percent from 8.64 percent after their shares mortgaged with financial institutions (lenders) were sold in the market by the lenders.

The principal promoters include Satyam founder chairman B. Ramalinga Raju, executive director B. Rama Raju and his family members. Their shares were pledged with institutions through SRSR Holdings Ltd, a family-owned investment firm floated by the Raju family in September 2006 to leverage shares held by them in Satyam and other associated firms.

Other firms include Maytas Properties and Maytas Infra that Satyam backed off from buying for $1.6 billon (Rs.79.2 billion/Rs.7,920 crore) Dec 17 after institutional investors revolted against the controversial deal.

The beleaguered promoters admitted to BSE Dec 29 that their minority holding in Satyam would have been diluted by institutional lenders if all the mortgaged shares were sold by the latter in the market to protect their margin calls.

Raju has also asked the management to include the dilution of the promoters’ holding in the agenda for consideration at the rescheduled board meeting Jan 10.

The Maytas’ deal fiasco also led to the exit of four independent directors from the board in succession in recent weeks.

Global technology research firm Forrester Research sounded its clients Dec 31 that the beleaguered company was heading for a major shakeout or a possible takeover as a consequence of its management’s bid to diversify from core IT business into realty sector by dipping into cash reserves of $1.2 billion (Rs.53 billion/Rs.5,300 crore).