iGate And Patni Computers - Satyakam Mishra 's Update

U.S.-listed iGate Corp. plans to cut its stake in Patni Computer Systems Ltd. by 8% to meet Indian regulatory requirements, but wants eventually to buy back all its outstanding shares and delist the company that it acquired earlier this year.

Indian rules require at least a 25% public shareholding in listed companies. iGate, which took control of the rival outsourcing services provider in a joint deal with private-equity firm Apax Partners LLP, now has an about 83% stake in it.

iGate doesn't have enough funds to repurchase the 17% stake held by Patni's public shareholders now to take the company off the stock market, Phaneesh Murthy, chief executive of both iGate and Patni, said in an interview Tuesday.

The 8% Patni stake that iGate plans to pare down is worth about $80 million based on the stock's closing price of 332.05 rupees ($7.38) on the Bombay Stock Exchange Monday. iGate has $770 million of debt, incurred to fund the $1.22 billion purchase of Patni, and Mr. Murthy said he intends to pay off this in five-six years.


Satyakam Mishra

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