Internet gateway and service provider Videsh Sanchar Nigam Ltd will use the proceeds from the sale of its 5.42 per cent stake in US satellite firm -- Intelsat Ltd -- for expansion and investment activities, while its holding in New Skies Satellite is valued at Rs 120 crore (Rs 1.2 billion).
"We will use the funds of Intelsat sales for expansion of our operations and investments wherever necessary," Tata group chairman Ratan Tata said at the company's 18th annual general meeting in Mumbai on Thursday.
The Internet gateway and service provider is likely to receive around Rs 786 crore ($169 million) from the sale, of which Rs 530 crore (Rs 5.3 billion) would be as capital gains, VSNL sources said.
The shares of Intelsat, which is being acquired by a group of private investors for $5 billion in cash and assumption of debt, was acquired by VSNL in 2001 for Rs 254 crore (Rs 2.54 billion).
The acquisition of the company is expected to be completed by December-end.
Ratan Tata also said that VSNL had not taken a decision to sell its 2.6 per cent in New Skies Satellite, even though a proposal has been placed with the company's board of directors.
"We had bought the stake for around Rs 56 crore (Rs 560 million) and expect to get Rs 120 crore (Rs 1.2 billion) in case we decide to sell it," he said.
New Skies is a fixed satellite communications company and The Blackstone Group was reported to have been interested in acquiring VSNL's stake in the firm.