FAR REACHING

Mumbai, July 25: Videsh Sanchar Nigam Ltd (VSNL) will buy Bermuda-based Teleglobe International Holdings Ltd for $239 million.

Teleglobe is a provider of wholesale voice, data, IP and mobile signalling services.

“The acquisition will be carried out by amalgamating Teleglobe with our subsidiary in Bermuda ? VSNL Telecommunications (Bermuda) Ltd ? and is expected to be completed in six to eight months,” VSNL director N. Srinath said.

The deal, valued at $239 million, comprises debt and payment of $4.50 per share to the Teleglobe shareholders, he said.

“The equity offer is at a 22 per cent premium to its last stock close on Nasdaq. Of the $239 million, $61 million will be in the form of debt to be settled,” VSNL chief financial officer Rajiv Dhar said.

Sixty six per cent of the one-billion-dollar Bermuda company is controlled by venture capital firm Cerebrus following a restructuring exercise in 2003. It mainly has operations in Canada. The acquisition will catapult VSNL to the league of top three global voice players.

Earlier this month, VSNL had completed the acquisition of TGN, an undersea cable network spanning 60,000 km through North America, Europe and Asia. TGN was previously owned and operated by Tyco.

The acquisition is subject to the approval of Teleglobe shareholders and governments in various countries, Srinath said.

The deal will give VSNL access to 240 countries with advanced voice, data and signalling capabilities. It will also bring ownership interests or capacity in more than 80 subsea and terrestrial cables to its fold, he said. Earlier, Teleglobe had acquired voice over internet protocol leader ITXC Corp in May 2004, Srinath said.