The Department of Telecommunications (DoT) is weighing several options to accommodate the American Depository Receipts (ADR) holders of the erstwhile Videsh Sanchar Nigam Limited (VSNL) when surplus land of the entity is hived off into a new company.
These options may include selling the land and giving the ADR holders cash or listing the new company with a shareholding pattern identical to that of VSNL.
However, DoT has to resolve whether to consider only those ADR holders who existed at the time of disinvestment or also include the current holders. ADR holders currently account for about 7 per cent of VSNL. When the government had divested a majority stake in VSNL to the Tata Group, ADR holders held about 13 per cent share in the company.
In 2002, a majority stake in VSNL was acquired by the Tata Group. However, the company?s 773 acres, spread over five locations in Delhi, Kolkata, Chennai and Pune, were not a part of the deal.
Meanwhile, the Telecom Commission has asked the Ministry of Law and Justice for its opinion on the proposed hiving off of the 773 acres into a new company. As Tata Communication is listed on the Bombay and the New York Stock Exchanges, legal advice is being sought on whether listing the resultant company is necessary.
Prior to this, DoT had proposed to hive-off the surplus land held by VSNL into a separate company to unlock the value by selling it. However, the Tata Group raised several issues.
