In addition, Tatas have announced an open offer to buy 26% of the company's shares from public shareholders, in compliance with Sebi’s takeover code
Mumbai: Telecom network gear maker Tejas Networks Ltd on Thursday said that its board had approved the issuance of shares and warrants to Tata Sons and its subsidiaries for an investment of ₹1,884 crore. The transaction, when warrants are fully converted to shares, will give Tatas a 43% shareholding in the company, putting them in control.
In addition, Tatas have announced an open offer to buy another 26% of the company's shares from public shareholders, in compliance with Sebi’s takeover code.
The share and warrant purchases will be done at ₹258 apiece.
The transaction involves an allotment of shares worth ₹500 crore and allotment of warrants worth ₹1,350 crore.
Tatas will also acquire shares worth ₹34 crore from some senior executives of the company.
Following the news, shares of Tejas Networks hit a 52-week high of ₹246 on the BSE on Thursday.
In a statement, Tejas Networks said it sees a very large opportunity in the telecom sector both in India and global markets with the new cycle of investments in 5G and fiber-based broadband rollouts. Tejas Networks will utilize the proceeds raised from the preferential allotment to invest organically and inorganically in the research & development, sales and marketing, people, infrastructure and to enhance its manufacturing and operational capabilities to cater to this large market opportunity, and for other general corporate purposes.
Saurabh Agrawal, executive director of Tata Sons Private Limited, said “We are excited to partner with Tejas Networks, India’s leading telecom and network company with a strong DNA of R&D. We look forward to working with the highly experienced management team of Tejas Networks and creating a full stack of globally competitive wireline and wireless products."
Current managing director and chief executive Sanjay Nayak shall continue to lead Tejas Networks along with the existing management team through the next phase of growth.
Sanjay Nayak, CEO and managing director at Tejas Networks said, “Tejas Networks was started with a vision of creating a top-tier global telecom equipment company from India. The association with Tata group will accelerate the realisation of this vision and enable us to address the large market opportunity available to us to build a financially strong global company, backed by a trusted brand. I am fully committed to making this a success and am excited about the next phase of our journey."
Kotak Mahindra Capital Company Limited is managing the open offer and Khaitan & Co is acting as the legal adviser to the transaction.
Tejas Networks designs, develops, and sells high-performance networking products to telecommunications service providers, internet service providers, utilities, defence and government entities in over 75 countries.
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