Aptech demerger plan approved

IRIS

Software education and training major Aptech has received government

clearance to restructure its business and create two focussed units. Aptech will

demerge its business into two units - one for training and the other for

software through the issue of new global depository shares (GDSs).

The minister for commerce and industry, Murasoli Maran, approved the

company`s proposal yesterday, following recommendations of the Foreign

Investment Promotion Board (FIPB).

The company plans to demerge the training division from Aptech and merge it

with Aptech Training (ATL). Hexaware Technologies (HTL), another group company,

will be dissolved without winding up and will be merged with Aptech to look

after the software business.

For the restructuring exercise, the group will issue 14,77,750 new GDSs of

ATL and 7,38,875 underlying equity shares of ATL to the existing Aptech GDS

holders in lieu of or in substitution of 14,77,750 Aptech GDSs and 7,38,875

underlying equity shares of Rs 10 each currently held by them in Aptech.

Simultaneously, 14,77,750 existing Aptech GDSs and 7,38,875 underlying equity

shares of Rs 10 each will stand cancelled. Last year, Aptech came up with an

issue of 10,452,962 GDSs representing 52,26,482 equity shares. One equity share

entitled the holder to two GDSs. These GDSs are now being replaced with fresh

GDS of the training company.

The demerger of the software and training businesses involves a 60:40 split

in the equity capital. Sixty per cent of equity will be with the newly-formed

training and education company while the software company will have 40 per cent

of equity capital. The brand name `Aptech` will remain with the training and

education business. Its promoters currently have 26 per cent stake in Aptech,

and 50 per cent in Hexaware Technologies.

`Software training business will look up only after July 2002. The companies

in the sector are likely to post positive results post July 2002,` say industry

analysts.

For fiscal ended December 2000, the company reported net profit of Rs 81.53

crore on sales of Rs 466.33 crore. For the quarter ended September 2001, it

reported a dip of 54 per cent in sales (Rs 69.76 crore) and 98.02 per cent in

profit (Rs 50.30 lakh), over the corresponding period last fiscal.

The stock has gained 150 per cent over its 52-week low of Rs 33.15 recorded

on October 4, 2001.

(Source: www.myiris.com )