Internet service prov­ider Sify Technologies proposes to issue equity shares of up to $86 million to affiliates of its promoter group. The proceeds from the preferential allotment will be used for working capital, ongoing expenditures and future expansions, a company release said.

Sify promoter group includes entities affiliated with Raju Vegesna, chief executive officer and managing director, and his brother Ananda Raju Vegesna, executive director. The proposed issue is of 12.50 crore equity shares of Rs 10 each at a purchase price of Rs 32 a share. The purchase price includes a premium of Rs 22 a share ($0.69) based on exchange rate of Rs 46.22 or $1.

The shares will be issu­ed at a discount to the prevailing American depository share market price since the allotment is for unlisted Indian equity shares. The shares will not be registered in the US or traded on Nasdaq as American depository shares. The allotment is subject to shareholders’ approval who meet on September 27 at Sify’s annual general meeting.

For the quarter ended June 30, Sify’s net loss went up to $3.23 million against a net loss of $2.75 million in the year-ago period. However, earning before interest, tax, depreciation and amortisation (Ebitda) was positive at $1.26 million for the quarter as compared with a negative of $0.20 million figure over the same period of the previous year.

Revenue for Q1 grew by about nine per cent to $38.63 million. Capital expenditure during the quarter was $1.42 million spent towards network expansion. However, selling and marketing expenses went down 10 percentage points over the same period last year.