Tata Communications Ltd (formerly known as Videsh Sanchar Nigam Limited) is a $2.9 billion company listed on the Bombay Stock Exchange and the National Stock Exchange of India and is the flagship telecom arm of the $103.3-billion Tata Group.

Hemisphere Properties India Ltd (HPIL) is a public company in which 51.12% is held by Government of India (GOI) and balance share is held by Panatone Finvest Limited (a Tata group company). Presently, shares of the company are not listed on any stock exchange and the company do not have any revenue from operations.

Transaction

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  • In 2002, GOI carried out disinvestment exercise of 25% of its equity holding in the Tata Communications (erstwhile VSNL) and terms of the bid required that bidder will take into account value of land which would remain with the VSNL and exclude surplus lands of approx. 740 acres excluding 95 acres which is in control of defence ministry.
  • Panatone Finvest Limited (PFL) was successful bidder in this process. Subsequently, a share purchase agreement (SPA) and Shareholders Agreement (SHA) is entered into, and to give effect to terms and condition of SPA and SHA it was required that such surplus land to be hived off or demerged into a separate company.
  • Further, Panatone is required to gift, sell or transfer, as the case may be, without further consideration, the shares of transferee company (i.e. now identified as HPIL) as allotted to Panatone under this scheme to
  1. The GOI to the extent of 25% of the HPIL’s issued shares, and
  2. The shareholders of the company (Tata communication) who tendered equity shares to Panatone to the extent their tender was accepted but not exceeding the maximum of 20% of the total issued capital of the transferee company.
  • Hence this scheme of reconstruction and arrangement is entered into by the Tata Communications (transferor/demerger company) and HPIL (transferee company) for transfer of the said surplus land. Swap Ratio will be 1:1 and appointed date is March 30, 2018.
  • Post scheme approval shares of HPIL will be listed on stock exchanges in which majority control by GOI

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Surplus Land Details

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