Panatone Finvest Limited, a Tata Group company, has agreed to buy a 43.3 per cent interest in Indian product based company Tejas Networks for roughly Rs 1,850 crore. Tejas Networks creates, develops, and distributes networking products to telecommunications, internet, and utility companies and defence and government agencies.
The revenues from the preferential allocation will be used to invest in research and development, sales and marketing, people, infrastructure, and manufacturing and operational capabilities, both organically and inorganically.
In compliance with SEBI Takeover Regulations, Panatone and other Tata group firms will make a public announcement to buy up to 4.03 crore equity shares of Tejas Networks, representing 26% of the emerging voting capital.
Panatone and Tejas Networks have agreed to a preferential allocation of 1.94 crore equity shares for 258 per share, totalling 500 crores. It contains a preferential allotment of 3.68 crore warrants, each entitling the holder to subscribe for one equity share for 258 per equity share, for a total of 950 crores. Panatone may exercise this right in one or more tranches during the period beginning with the warrants’ allotment and ending 11 months after that.
There is also a preferential allotment of 1.55 crore warrants, each entitling the holder to subscribe for one equity share for 258 per equity share, for a total of 400 crores. Panatone may exercise this right in one or more tranches between the expiration of 12 months from the date of allotment of the warrants and 18 months after that. The arrangement also includes the purchase of up to 13 lakh Tejas Networks equity shares from specific management individuals at a price not exceeding 258 per equity share for a total of 34 crores.