Shareholders of Coforge Ltd, formerly known as NIIT Technologies, including its controlling owner Baring Private Equity Asia, will sell securities worth as much as $750 million in a proposed American Depositary Receipts (ADRs) offering in the US, a person aware of the development said.
An ADR can represent one or more shares of a foreign company that seeks to access the US capital markets.
On Tuesday, Coforge filed an offer document informing the stock exchanges that its shareholders will sell ADRs in a US IPO. The company will not receive any money from the sale.
Minority shareholders of the company can also participate in the secondary share sale, the company said. Shareholders have to inform the company about their willingness to participate in the offering between 18 November and 2 December.
Baring’s contribution to the share sale will be at 100% of the proposed $750 million ADR sale if other shareholders do not tender their shares in the ADS offering.
Baring holds a 50.18% stake in the company currently.
“The principal purposes of this offering are to create a public market for our ADSs and to facilitate our future access to the public equity markets. All ADSs sold in the offering will be on behalf of the selling shareholders. We will not receive any of the proceeds from the sale of the ADSs in this offering,” Coforge said in the offer document.
Investment banks Citigroup, JP Morgan and Bank of America are advising Coforge on this ADS offering.
Coforge declined to comment. An email sent to Baring Private Equity Asia did not elicit a response till press time.
With its ADS offering, Corforge will join companies such as Infosys and ICICI Bank who have previously sold such securities in the US market.
In 2019, Hulst B.V., an affiliate of Baring Private Equity Asia, entered into a series of transactions pursuant to which it acquired an aggregate 70.1% stake in what was then known as NIIT Technologies.
As of 31 March, Hulst held 64% of the company’s equity shares. Between 31 March and 30 September, Hulst engaged in a series of transactions pursuant to which it sold an aggregate 13.8% stake in accordance with Baring PE Asia’s usual practices for returning capital to the investors of the funds it manages, the company said in its offer document.
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