New dispute delays Patni Computers stake sale
A fresh dispute among the Patni brothers over the rights of the new investor in Patni Computer Systems is delaying the stake sale process in the IT service firm. This was one of the major issues holding back the sale of the Patni borthers’ in the venture, as potential buyers wanted management control with clear rights.
Under the current shareholding structure, all three Patni brothers hold equal stakes of around 14% in the company. Ashok and Gajendra Patni are selling part of their stakes, while Pe firm General Atlantic that holds around 16%, is selling its entire stake. The new investor buying their stakes would become the single largest shareholder in the company.
Following the stake sale, Narendra Patni was supposed to cede management control and function as non-executive chairman. The board framework of the agreement was that present chairman and CEO Narendra Patni would retain some of the rights he enjoys.
However, the new investor would have the right to appoint a new CEO and also have a say in operational issues and the future growth strategies. However, the process seems to have run into a roadblock once again.
The deal was to be concluded this month and Patni Computer was to make a public announcement of the intent of its major share-holders to divest. PE firms Blackstone, Carlyle, Apax Partners and Texas Pacific Group were in the list of final rights having been sorted out, negotiations were to be centred primarily around the price.
Share of Patni Computer Systems that have taken a beating along with that of other IT stocks in the last few weeks, closed at Rs.442.25, down 2.2% from its previous close on the BSE.
