The U.K.’s leading telecom giant British Telecom (BT) on Tuesday completed the sale of 5.5 per cent stake in Indian IT firm Tech Mahindra to the latter’s parent group Mahindra & Mahindra for Rs. 451 crore.
BT, which is struggling with a huge pension deficit, had 30 per cent stake in Tech Mahindra prior to this deal. Post the sale, it will come down to 24.5 per cent, BT said in a statement. M&M’s stake will increase to 48.5 from 43 per cent. The remaining stake is with Mahindra BT Investment Co. Mauritius Ltd.
On November 26, M&M had entered into an agreement with BT to acquire 5.5 per cent stake in its group company Tech Mahindra from BT Group Plc.
“Following the announcement with Mahindra & Mahindra on November 26, BT has completed the sale of a 5.5 per cent shareholding in Tech Mahindra to the auto major for a total gross proceeds of Rs. 451 crore at Rs. 653.6 per share,” BT said in a filing to the London Stock Exchange.
BT has also indicated, though it expects to continue to have a shareholding in Tech Mahindra for some time, that it may consider further stake sale in the IT firm.
BT’s remaining 24.5 per cent stake in Tech Mahindra, could fetch the telco a whooping Rs. 2,065.94 crore valued at today’s share price of Rs. 673.20.
In the November 26 statement, M&M had said it will give a waiver to its rights to buy further stake in the software firm.
The joint venture between BT and M&M came into existence 1986 which was later named as Tech Mahindra.
As per second quarter ended June-September 30, BT had a net debt of 8.7 billion pounds.
Shares of Mahindra & Mahindra settled at Rs. 757.60, down by 1.34 per cent on BSE and Tech Mahindra closed at Rs. 673.20, up 3.88 per cent from the previous close.