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Reliance raises bid price for Flag

Mumbai, Dec. 6 (PTI): Reliance Infocomm Ltd today raised its bid for Flag Telecom by nearly $ 4 million, under a second amendment with the former, increasing the total amount to $ 210.95 million from $ 207 million.

The new consideration, payable to Flag Telecom shareholders and optionholders, reflecting a new price per share of $ 97.41, Flag Telecom said.

In addition, Harbert Distressed Investment Master Fund Ltd, the largest shareholder of Flag Telecom, has entered into a voting agreement with Flag Telecom and Reliance Gateway by which Harbert has agreed to vote in favour of the amalgamation between the two, it said in its website in London.

Harbert is a direct holder of 37.1 per cent of Flag’s outstanding common shares. In connection with the voting agreement, Reliance Gateway has agreed to pay Harbert $ 1 million in cash upon the consummation of the amalgamation, it added.

As part of the voting agreement with Harbert, Flag Telecom has agreed to terminate the registration of its common shares under the Securities and Exchange Act of 1934, as amended, prior to the date on which Flag Telecom holds a special meeting of shareholders in order to vote on the amalgamation.

A Reliance Infocomm spokesperson declined to comment on the issue, stating the company would comment only after the board meeting of Flag, slated to be held on December 22.

Patrick Gallagher, co-chairman and CEO of Flag Telecom said: “we continue to make good progress towards amalgamating our company with Reliance Gateway. With the agreement with Harbert we have achieved a key milestone towards obtaining the requisite vote to approve the amalgamation.”

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