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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
SIFY LIMITED
(FORMERLY SATYAM INFOWAY LIMITED)
(Name of Issuer)
EQUITY SHARES
(Title of Class of Securities)
804099208
(CUSIP Number)
SANDEEP REDDY, Director
VentureTech Solutions Private Limited
12, Subba Rao Avenue, Chennai -600 006.
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
DECEMBER 16, 2002
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: [ ]
(Continued on following pages)
(Page 1 of [7] Pages)
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP No. 804099208 Page 2 of [7]
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1 NAME OF REPORTING PERSON
VENTURE TECH SOLUTIONS PRIVATE LIMITED
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) X
(b)(TM)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
PF (Personal Funds) and AF (Affiliate Funds)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e): Not Applicable
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
INDIA
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NUMBER OF 7 SOLE VOTING POWER: 2,114,884
SHARES
BENEFICIALLY -----------------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -----------------------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER: 2,114,884
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10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,855,624 (Notes 1 & 2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES: NOT APPLICABLE
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
66.64%
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14 TYPE OF REPORTING PERSON
CO
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1. See Item 6 herein. Includes 2034884 equity shares beneficially owned by
Venture Tech Solutions Private Limited ("Venture Tech") and an aggregate of
19740740 shares beneficially owned by SAIF Investment Company Limited
("SAIF") and Satyam Computer Services Limited ("Satyam"). The Investor
Rights Agreement provides for, under certain conditions, the designation by
each of Venture Tech, SAIF and Satyam of a member or members of the board
of directors of the Company and the election of each such designated member
by all of the Company's equity shares held by SAIF, Satyam and Venture
Tech. By virtue of the Investor Rights Agreement, the Reporting Person may
be deemed a group with Satyam and SAIF within the meaning of Section
13(d)(3) of the Act, and as a result, to have beneficial ownership of the
equity shares beneficially owned by Satyam and SAIF. The Reporting Persons
disclaim such beneficial ownership and are filing this Schedule 13D on
behalf of themselves and not on behalf of any other person or entity.
2. Includes existing holding of 80,000 shares.
Item 1 Security and Issuer
This statement relates to the ordinary equity shares, par value Indian
Rupees 10 per share (the "Equity Shares") of Satyam Infoway Limited, a company
incorporated in India (the "Company"). The address of the principal executive
offices of the Company is Tidel Park, 2nd Floor, No.4, Canal Bank Road,
Taramani, Chennai, 600113, India.
ITEM 2. IDENTITY AND BACKGROUND
(a) Pursuant to Rule 13d-1(a) of Regulation 13D-G of the General Rules
under the Securities Exchange Act of 1934, as amended (the "Act"), the
undersigned hereby file this Schedule 13D Statement on behalf of Venture Tech
Solutions Private Limited, a company incorporated in India (the "Investor" or
the "Reporting Person").
The Investor Rights Agreement (the "Investor Rights Agreement"), dated
October 7, 2002, among the Company, the Investor, Satyam Computer Services
Limited ("Satyam") and SAIF Investment Company Limited ("SAIF") provides for,
under certain conditions, the designation by each of the Investor, Satyam and
SAIF of a member or members of the board of directors of the Company and the
election by each such designated member by all Equity Shares held by the
Investor, Satyam and SAIF. By virtue of the Investor Rights Agreement, the
Investor may be deemed to be a group with Satyam and SAIF within the meaning of
Section 13(d)(3) of the Act, and, as a result, to have beneficial ownership of
the Equity Shares beneficially owned by Satyam and SAIF. The Reporting Person
disclaims such beneficial ownership and is filing this Schedule 13D on behalf of
itself and not on behalf of any other person or entity and understand that SAIF
has filed a separate Schedule 13D.
(b) and (c) The principal business address of the Investor, which also
services as its principal office, is 12, Subba Rao Avenue, Chennai 600 006,
India. The principal business of the Investor is the purchase, sale, acquisition
and holding of technology related assets.
Pursuant to Instruction C to Schedule 13D of the Act, the name, residence
or business address, and present occupation or employment of each director,
executive officer and controlling person of the Investor is as follows:
[Insert Table giving name, residence or business address, and principal
occupation or employment]
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to a Subscription Agreement, dated October 7, 2002, between
(Page 3 of [7])
the Company and the Investor (the "Subscription Agreement"), the Investor
purchased 2,034,884 Equity Shares for an aggregate purchase price which is the
equivalent of of US$3.5 million as on the date of the Agreement, in cash. The
source of funds used by the Investor to purchase the Equity Shares are in the
form of personal and affiliate funds.
ITEM 4. PURPOSE OF TRANSACTION
The Investor acquired and continues to hold the Equity Shares reported
herein for investment purposes. Depending on market conditions and other factors
that the Reporting Person may deem material to its investment decisions, the
Reporting Person may purchase additional stock in the open market or in private
transactions. Depending on these same factors, the Investor may sell all or a
portion of the Equity Shares in private transactions or in the open market.
In addition, in connection with the purchase of Equity Shares, the Investor
entered into the Investor Rights Agreement (as described in Item 6 below), which
contains provisions regarding, among other things, the acquisition,
registration, disposition and voting of Equity Shares as well as certain
provisions regarding the composition of the Company's board of directors (the
"Board"). Further, the Investor has under the Investor Rights Agreement agreed
to subscribe for an additional 2,034,883 Equity Shares or equivalent ADSs of the
Company for a consideration equivalent to US$ 3.5 million as of the date of the
Agreement on or before 30 April 2003. Except as set forth in this Item 4, the
Reporting Person has no present plans or proposals which relate to any of the
events described in clauses (a) through (j) of the instructions to Item 4 of
Schedule 13D of the Act.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) INVESTOR
The aggregate number of Equity Shares that the Investor may be deemed to
own beneficially, pursuant to Rule 13d-3(d)(1)(i) of the Act, is 21,775,624
(including 2,034,884 Equity Shares beneficially owned by the Investor and an
aggregate of 19,740,740 by Satyam and SAIF), which constitutes approximately
66.4% of the outstanding Equity Shares.
By virtue of the Investor Rights Agreement, the Reporting Person may be
deemed to be a group with Satyam and SAIF within the meaning of Section 13(d)(3)
of the Act, and, as a result, to have beneficial ownership of the Equity Shares
beneficially owned by Satyam and SAIF. The Investor disclaims such beneficial
ownership.
(b) INVESTOR
The Investor has the sole power to vote or to direct the vote and to
dispose or to direct the disposition of 2,034,884 Equity Shares.
(c) On October 7, 2002, the Investor and the Company entered into a
Subscription Agreement (the "Subscription Agreement") whereby the Investor
agreed, pursuant to the terms contained therein, to purchase an aggregate of
2,034,884 Equity Shares at a price per share equal to US$1.72 comprising an
aggregate purchase price of US$ 3.5 million in cash. The transactions
contemplated under the Subscription Agreement were privately negotiated and
closed on December 16, 2002.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
The information set forth in Item 4 of this Schedule 13D is hereby
incorporated by reference.
INVESTOR RIGHTS AGREEMENT. In connection with the Investor's purchase
(Page 4 of [7])
of Equity Shares, the Company, the Investor, Satyam and SAIF entered into the
Investor Rights Agreement. The Investor Rights Agreement provides for the
Investor, Satyam and SAIF to vote its Equity Shares for the purpose of
designating members to the Board on the following terms:
- Two individuals shall be designated by each of the Investor, Satyam and
SAIF (for so long as the Investor, Satyam and SAIF, as the case may be, holds in
aggregate at least 10% of the outstanding Equity Shares) and one individual
designated by each of the Investor, Satyam and SAIF (for so long as the
Investor, Satyam and SAIF, as the case may be, hold in aggregate at least 5% of
the Equity Shares).
- One individual shall be designated by South Asia Regional Fund Limited
("SARF"), a Mauritius company (for so long as SARF is entitled to appoint one
member to the Board pursuant to a Share Subscription and Shareholders Agreement,
dated as of February 5, 1999, by and among SARF, Satyam and the Company (as
amended on September 14, 1999).
- The members to the Board described above along with the managing director
of the Company shall appoint by majority vote such number of additional members
to the Board from a list of independent directors nominated in accordance with
the provisions of the Investor Rights Agreement such that the number of members
to the Board is increased to nine.
- The chairman of the Board shall be appointed from among the members of
the Board by a majority vote of the directors nominated by the Investor and
SAIF.
- One director nominated by each of the Investor and SAIF shall be
appointed to each of the audit committee, the nominating committee and the
compensation committee (to the extent permitted by requirements of law).
The Investor, Satyam and SAIF are also required to cooperate in the removal
and replacement of any director designated by the Investor, Satyam and SAIF, as
the case may be.
Until the date that neither the Investor (together with its permitted
transferees) nor SAIF (together with its permitted transferees) holds at least
7.5% of the non-diluted Equity Shares, the Company is prohibited by the Investor
Rights Agreement from taking any of the following actions without the approval
of three-fourths majority of the aggregate number of Equity Shares held by the
Investor (together with its permitted transferees) and SAIF (together with its
permitted transferees):
- Any change in the capital structure of the Company or issue (other than
employee shares options) Equity Shares or equivalents or other rights to
subscribe for, acquire or call for shares or redemption or purchase by the
Company of shares or a reduction in the share capital of the Company or in any
way change the share capital of the Company;
- The issue of any debenture, the making of any loan or extension of any
indebtedness by the Company or the granting of any credit or creation of any
encumbrance over any of the Company's assets, or the entering into of any
guarantee or indemnity except in limited circumstances such as in the ordinary
course of business and as contemplated by the Company's business plan;
- Appoint any director of the Company or member to any committee except in
accordance with the Investor Rights Agreement;
- The merger, acquisition or winding up of the Company or participation in
any scheme of reconstruction or any settlement involving the Company or
liquidation or dissolution of the Company;
(Page 5 of [7])
- Any acquisition of the whole or substantially the whole of the assets and
undertaking of the Company or an acquisition by the Company of any part of (or
the whole of) the stock or assets and undertakings of another company;
- The assignment, sale or other disposal, lease or lending in any twelve
month period of any asset or related group of assets of the Company having a net
book value in aggregate in excess of 10% of the net book value of the assets of
the Company;
- The declaration of any dividend, distribution of Company's share capital
or purchase, redemption or any kind of acquisition of any of the Company's
capital stock or equivalents (other than pursuant to the Investor Rights
Agreement);
- The Company establishing or materially varying any share or share option
plan for any director or employee of the Company. Any loan to or repayment of
debts to directors, officers or affiliates of the Company except as may be
agreed by the Investor prior to the date of the Investor Rights Agreement;
- Any transaction by the Company with any shareholder or any associated
company of any shareholder or any directors of the Company or the related
parties of any of them involving consideration given or received in excess of
US$100,000; and
- Any change in the nature or material modification of the business
undertaken by the Company.
The Investor Rights Agreement also provides for transfer restrictions on
the Equity Shares held by the Investor, Satyam and SAIF, including the
following:
- RIGHT OF FIRST OFFER. In the event that the Investor, Satyam or SAIF
wishes to transfer any restricted Equity Shares to a third party, each of the
Investor (and its permitted transferees) and SAIF (and its permitted
transferees) shall have the right to purchase a proportionate number of the
offered restricted Equity Shares at the offered price per share.
- TAG-ALONG RIGHT. In the event that the Investor (or its permitted
transferee) is transferring any restricted Equity Shares to a third party, then
Satyam shall have the right to require the third party to purchase a
proportionate number of restricted Equity Shares held by Satyam at the same
price per share to be received by Investor.
- DRAG-ALONG RIGHT. In the event that SAIF (or its permitted transferee)
wishes to sell all or a portion of its Equity Shares to a third party in a
transaction approved by three-fourths majority of the aggregate of the Equity
Shares held by the Investor (and its permitted transferees) and SAIF (and its
permitted transferees), then SAIF shall have the right to require Satyam and the
Investor to sell all or a portion of their Equity Shares to such third party at
the same price per share to be received by SAIF.
- PRE-EMPTIVE RIGHTS. Except with respect to certain exempt issuances
described in the Investor Rights Agreement, if the Company wishes to issue any
share capital or other securities convertible into share capital to any person,
then the Company shall offer a proportionate amount of such share capital or
other securities to each of the Investor, Satyam and SAIF at a price per
security equal to the Company's offered price.
References to, and descriptions of, the Investor Rights Agreement in this
Item 6 is qualified in its entirety by reference to the copies of the Investor
Rights Agreement which is included as Exhibit 1 to this statement and which are
incorporated by reference in this Item 6 in its entirety where such references
and descriptions appear.
(Page 6 of [7])
Except as set forth herein or in the Exhibit filed or to be filed herewith,
there are no contracts, arrangements, understandings or relationships with
respect to the Equity Shares owned by Reporting Person.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 - Investor Rights Agreement, dated October 7, 2002, by and among
Sify Limited (formerly Satyam Infoway Limited), SAIF Investment Company Limited,
Satyam Computer Services Limited and Venture Tech Solutions Pvt. Ltd. filed
herewith.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of January 22, 2003
VENTURE TECH SOLUTIONS PRIVATE LIMITED
By: /s/ Sandeep Reddy
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Name: Sandeep Reddy
Title: Director
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement: provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT
CONSTITUTE FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
(Page 7 of [7])
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 22, 2003
By: /s/ Sandeep Reddy
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Name: Sandeep Reddy
Title: Director
Exhibit Index
Exhibit 1 - Investor Rights Agreement, dated October 7, 2002, by and among
Sify Limited (formerly Satyam Infoway Limited), SAIF Investment Company Limited,
Satyam Computer Services Limited and Venture Tech Solutions Pvt. Ltd, filed
herewith.