Nortel Networks Corp, the North American telecom equipment maker which filed for bankruptcy last year, has sold a total of 4.5% stake or 1.29 million shares in Sasken Communication Technologies Ltd in the last one week. Nortel has sold its stake through bulk deals at an average price of Rs 186.27 per share, netting around Rs 24 crore or $5.3 million.
Nortel held a 9.8% stake in the telecom software firm as of September 2009. Nortel had cut its stake in 2008 too, when Sasken announced a buyback at Rs 260 per share. VCCircle estimates that Nortel has realised Rs 38.7 crore or $8.5 million through sale of Sasken shares, till date.
Nortel had invested $10 milion in Sasken in April 2005 just before the company went for a public listing. Its stake post the Sasken IPO stood at 11.72%. Its current holding, post this sale, could fetch another Rs 25 crores or $5.5 million. Other venture capital investors in Sasken were Nokia Growth Partners, Intel Capital and NEA, who have exited since then.
In a parallel development, Ashish Dhawan, senior managing director of one of India’s largest PE firms ChrysCapital, has been buying into Sasken. Dhawan has increased his stake to over 7% stake in Sasken, up from just 2.8% at the end of June 30 2009. Dhawan also has investments in companies like Network18 Media & Investments and Logix Microsystems among others.
Sasken reported revenues of Rs 698 crore in FY09 with a net profit of Rs 42.3 crore. Nortel, which is its fifth largest customer, recently sold its enterprise solutions business Avaya Inc, a network equipment maker. Avaya was bought by private equity firms Silver Lake and TPG Capital in 2007.
Sasken said in December that it has started talks with Avaya and the deal would not impact its business in the immediate future. Sasken is a pioneer in telecom R&D outsourcing and has been a key supplier to Nortel since 1991. Sasken Communication Technologies Limited closed at Rs. 182 per share on the stock exchanges yesterday.