India's leading international telecommunications service provider, Videsh Sanchar Nigam Ltd (VSNL) has announced that it has sold 1,517,936 shares representing 10% of the paid up capital in its wholly-owned subsidiary VSNL Lanka Ltd. The shares have been acquired by Sunshine Holdings PLC, a Sri Lankan conglomerate for about Rs 27.2 million (US$690,254), an official release said.

Apart from telecom sector, Sunshine Holdings also has interests in pharmaceuticals, travel & tourism, tea & rubber cultivation and managing portfolio investments.

VSNL Lanka Ltd. is a fully owned subsidiary of VSNL, a TATA group company and one of the largest telecom players in the world. The company was incorporated on 12th June 2003 as a Public Limited Company incorporated under the companies Act (No. 17 of 1982) of Sri Lanka. The company has been offering international voice and data services in Sri Lanka through an external gateway operator's license since February 2004.

Rajiv Dhar, CFO, VSNL said, "This partnership with Sunshine Holdings PLC will enable VSNL Lanka to capitalize on our partner's intimate knowledge of and experience in the Sri Lankan market. This is also part of our attempt to unlock value for our shareholders in an appropriate manner."

Vish Govindasamy, MD, Sunshine Group said, "We have been working closely with VSNL in Lanka and this investment reiterates our commitment to this partnership. We firmly believe that VSNL Lanka will be able to achieve a strong position in the Sri Lanka telecom market."

Sunshine Holdings PLC has the option to acquire an additional 5% of VSNL Lanka's share capital in the next 12 months at fair market value, VSNL said in a statement.

The firm presently holds market cap worth Rs. 21037 crore, PE Ratio of 50.71; EPS of 14.56 and BV of 223.14. The firm has registered a net profit of Rs  61 crore for the quarter ended September 2007 as against Rs. 93 crore in same quarter of last year.

The stock closed today at Rs. 735 on NSE, down by 2% with previous close of Rs. 748. It touched an intraday high of Rs 770 and low of Rs 722.