Delisting fulfills vision of 'one company': Patni CEO

iGate Corp has agreed to buy out the minority shareholders of subsidiary Patni Computer Systems (PCS). i-Gate will pay Rs 520 a share and delist the Indian software services company from Indian stock markets. Nasdaq-listed iGate will spend USD 272 million on the delisting.

It is interesting to note that iGate had said in November that it would not spend more than USD 215 million to buy out Patni's minority shareholders and that it would not go ahead with the delisting if the price was more than Rs 450 a share. Sunanda Jaysheelan spoke to chief executive officer Phaneesh Murthy on why iGate agreed to pay the higher price to delist PCS.
"We would like to do this if we could figure out a way to raise the money and afford it. We had originally got a debt level of USD 215 million by our banks. First, they asked for their updated financials of the December 31st quarter and that took their confidence up quite dramatically because the margins had gone up nicely. We were able to expand that debt limit to USD 265 million. Second, in the middle of the quarter the price at which the rupee was trading against the dollar had come down to 49-49.5. For the USD 265 million, we actually realised 51.2 that helped us a lot. Lastly, we always had the vision of one company. I have always been uncomfortable with two listing model and to me it was just a question of whether we could afford it or not?" said Murthy.
We will finish this transaction, move forward as one company and then take care of things from here onwards. Below is the edited transcript of the interview. Also watch the accompanying video. Q: Some of Patni shares has not been tendered by some shareholders. when do you expect that to close out?
A: Immediately after the delisting announcement and actual delisting, many of the institutions who have tendered shares above Rs 520 normally will tender right back, immediately at Rs 520 because very few people