Oracle to pare holding in Oracle Financial to comply with regulations

MUMBAI: Oracle Corp said on Wednesday it would cut its stake in Oracle Financial Services Software Ltd to 75% to meet regulatory requirements, a turnaround for the US software giant which in the past has sought to take the company private.

Oracle, which currently has an 80.3% stake in Oracle Financial, said it would offload the shares through an offer for sale transaction.

Oracle's billionaire chief executive Larry Ellison spent years trying to build his stake in the company, previously known as i-flex, following the 2005 acquisition in a bid to take it private. After the last buy back offer in 2006, Ellison had told Indian investors that there would not be another offer for at least 5 years.

India's market regulator Securities and Exchange Board of India requires all companies trading on Indian exchanges to have a minimum public shareholding of 25% by the end of June. The regulator has warned that promoters risk sanctions if they do not comply with the deadline.

India's second largest software exporter, where promoters own close to 80% equity, is also looking at diluting their ownership to comply with the new regulations.

"Oracle is committed to continuing its strategic relationship with OFSS and expects to otherwise maintain its position as the majority owner and promoter of OFSS," the company said in a statement.

Morgan Stanley India Co. Pvt. Ltd and Deutsche Equities India Pvt. Ltd have been appointed brokers for the sale.

For the January-March quarter, Oracle Financial Services reported consolidated revenue of Rs. 881.5 crores. The company's operating margin was 33% for FY 2012-2013.

Shares were trading down 5% an hour before close of trade on Bombay Stock Exchange, where the broader index remained flat with a marginal 0.3% gain.