News about Videsh Sanchar Nigam Limited - National Stock Exchange of India Limited

October 6, 2006

The media had reports that Telecom Commission has proposed a scheme of demerger for Videsh Sanchar Nigam Ltd's surplus land of 773 acres.

The Exchange, in order to verify the accuracy or otherwise of the information reported in the media and to inform the market place so that the interest of the investors is safeguarded, had written to the officials of the company.

Videsh Sanchar Nigam Ltd. has vide its letter inter-alia stated, "In this regard please refer to the topic "Demerger of Surplus Land" on Page 18 of VSNL's Annual Report for the year 2005-2006 which is reproduced hereunder: "Under the terms of the share purchase and shareholders' agreements signed between the parties at the time of privatisation, it was agreed that certain identified lands would be demerged into a separate company. It was further agreed that if for any reason the Company cannot hive off or demerge the land into a separate entity, alternative courses as stipulated in the share purchase and shareholders' agreement would be explored. A draft scheme of demerger has been presented to the VSNL Board, and the parties to the shareholders' agreement are currently examining the legality and feasibility of implementing the scheme. The land identified for demerger at different locations measures 773.13 acres, and carries a book value (as indicated in the accounts) of Rs. 1.64 million." Till now no intimation of any further developments on the subject has been received by the Company."

Source: National Stock Exchange of India Limited

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