NTT has sold its entire holding of 635,076,318 shares, representing 35.19% of Sri Lanka Telecom, at a price of SLR50.50 ($0.47) a share totalling SLR32 billion.
Global Telecommunications Holdings, which is a Netherlands-based company will now, under the Sri Lanka Takeover Code, have to make a mandatory offer to the remaining shareholders of SLT. GlobalÆs parent, Usaha Tegas, is a holding company of Ananda Krishnan and also owns a stake in Malaysian telco Maxis.
SLT was Sri LankaÆs first telecommunications company and has an estimated 87% market share of the fixed line network in the country. NTT paid $225 million for a 35% stake in SLT in 1997, one year after it was incorporated as a public limited company. The rest was owned by the government. In 2002 SLT acquired Mobitel, one of the four mobile operators in the country, in which it previously had a 40% stake.
SLT listed in 2002 at which time the majority shareholder, the government of Sri Lanka, sold a 12% stake. Post-IPO the government holds 49.5% and the public 15.3%.
SLT currently has a customer base of 800,000 and provides domestic and international voice, internet and other services to customers. Mobitel currently has 15% share of the mobile market.
NTT is an information and communications technology company which offers internet protocol, web-based, and managed network solutions. Its revenues for the fiscal year ended March 31 2007 were more than $10 billion. NTT said it ôwill post a special profit of approximately 3.3 billion ($33 million) from the sale of the SLT stakeö.
Since its investment, NTT has provided strategic advice to SLT, trained its employees and helped it develop marketing strategy. NTT has also helped develop SLTÆs network, information technology and its operating and financial controls and systems.
NTT had indicated in March 2007 that it was in discussions with Global but a deal was then held up by a Fundamental Rights Application filed by a law-maker against the sale of shares. On March 10 2008 Sri Lankan courts ruled that the deal between NTT and Global should be permitted to move forward.
The deal was transacted by two Colombo-based brokerage houses and is the largest ever trade on the Sri Lanka Stock Exchange. SLT shares were trading around SLR40 before the deal was announced and moved up intra-day to SLR48, near the offer price.
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