Wednesday, April 2, 2008

Japan NTT sells S.Lanka Telecom stake for $297 mln

We are obliged to make an offer to the holders of SLT (Sri Lanka Telecom) - COLOMBO, April 1 - Japan's Nippon Telegraph and Telephone Corp sold its 35.2 percent stake in Sri Lanka Telecom to a Malaysian mobile network operator for $297 million, sending Sri Lanka Telecom shares to a record high.

The deal, which values Sri Lanka Telecom at $844 million, had been expected after a court last month ruled that NTT could sell its stake in Sri Lanka Telecom following a lengthy legal battle, but the price exceeded analysts' expectations.

NTT and Sri Lanka Telecom said Tuesday's sale of the 635 million shares to a unit of Maxis Communications' parent Usaha Tegas Sdn Bhd was completed at 50.50 rupees per share, a 22 percent premium to Monday's closing price

"The market expected the deal to go through around 42-45 rupees level. We never expected it at 50.50 rupees," said Vajira Premawardhana, head of research at Lanka Orix Leasing.

Global Telecommunications Holdings N.V., an investment unit of Usaha Tegas Sdn, said it was obliged to launch an offer for the remaining shares in Sri Lanka Telecom.

Shares in Sri Lanka Telecom surged 16.4 percent to a record high of 48 rupees, giving a boost to the CSE All-share index , which jumped 2.7 percent.

NTT Communications, a data network and outsourcing unit of Japan's NTT, said it would book a 3.3 billion yen gain on the sale of the stake in April-June.

"The timing was right to seek returns on our investment," a NTT Communications spokesman said. "Sri Lanka Telecom now looks for growth in the mobile arena, where we cannot help."

Officials at the Colombo Stock Exchange said it had been a record day for business on the Sri Lankan bourse.

"It is the highest ever turnover in a single day of the Colombo Stock Exchange's history," Thushara Jayaratne, market development manager at the bourse told Reuters.

MAXIS OFFER

Global Telecommunications announced a mandatory offer to buy the remaining shares of Sri Lanka Telecom.

"We are obliged to make an offer to the holders of SLT (Sri Lanka Telecom) to acquire the remaining ordinary shares carrying voting rights held by them in SLT," the company said in a letter to the Colombo Stock Exchange.

Sri Lanka Telecom is among the biggest companies in the local exchange, accounting for about 10 percent of the market's capitalisation. Its capitalisation after the deal is around 86.63 billion rupees, bourse data showed.

Standard and Poor's Rating Services revised the outlook of Sri Lankan Telecom to "negative" from "stable" on Feb. 22, citing the country's risk factors and the business environment in which it operates.

Reuters

0 comments: