OREANDA-NEWS. Tata Communications has announced its intention to delist its American Depositary Shares (ADS), as evidenced by American Depositary Receipts (ADR), from the New York Stock Exchange (NYSE) and to terminate its ADR program.

Tata Communications will concentrate all trading of its ordinary shares on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) and will be terminating its current ADR program. The company's board of directors has taken into account the recent low trading volume of its ADS on the NYSE, the upcoming date for compliance with the Securities and Exchange Board of India (SEBI) mandate on minimum public shareholding and the associated costs of maintaining the listing and related obligations.

The company intends to file a Form 25 with the US Securities and Exchange Commission (SEC) to effect the delisting from the NYSE on or about May 28, 2013. The delisting will become effective 10 days after the filing. Tata Communications will continue to be subject to reporting obligations under the US Securities Exchange Act of 1934, until such time as it can terminate its registration under the act.

The company further announced that, subject to the delisting becoming effective, it will amend the deposit agreement pursuant to which the ADRs were issued and terminate the deposit agreement and its ADR program. The amendment will require the depositary to sell the ordinary shares of the company underlying any ADRs that remain outstanding as soon as practicable after the date that is 30 days after termination of the ADR program becomes effective, on or about August 14, 2013.

Holders of the company's ADRs will have until at least August 13, 2013 to decide whether to retain their interest in the ordinary shares of the company. At any time prior to August 13, 2013, ADR holders may surrender their ADRs in exchange for the underlying ordinary shares of the company. As soon as practicable on or after August 14, 2013, the depositary will sell the ordinary shares underlying any ADRs that have not theretofore been surrendered. The depositary shall thereafter hold uninvested the net proceeds of any such sale, for the pro-rata benefit of the holders of any such outstanding ADRs.

Vinod Kumar, managing director and chief executive officer, Tata Communications, said, "Tata Communications has derived a number of important benefits from its NYSE listing since 2000, including the financial reporting discipline we have implemented to comply with US reporting company requirements. The company is committed to continuing the highest standards of corporate governance and internal controls and will continue to be subject to the comprehensive reporting and governance requirements of the Indian exchanges. Our decision to delist, deregister and terminate our ADR program was the result of several factors, including the fact that our ADR program had not developed the trading volumes or liquidity we had initially hoped when we listed. In addition, the soon-to-be effective SEBI guidelines on minimum public shareholding was a crucial factor in our decision since, under SEBI's guidelines, ADRs are not to be considered when calculating the percentage of public shareholding.

After considering all the issues very carefully, the company's board came to the conclusion that this decision is the right move for the company at this stage in its evolution."

The company's decision to delist from the NYSE, deregister with the SEC and terminate its ADR program does not call into question the company's strategic vision for the US which has been one of its core markets in its overall global strategy and will continue to be so moving forward.