Silverline drops plan to buy CTC Corp.

MUMBAI: Indian software services firm, Silverline Technologies Ltd., has

dropped its plan to acquire US-based CTC Corp and its units, and instead plans

to buy just one of its subsidiaries, a spokesman said on Monday.

Silverline has informed the Bombay Stock Exchange that its board will meet on

Tuesday to consider the acquisition of ecomServer Inc, "in place of"

the planned acquisition of CTC Corp.

The acquisition is part of Silverline's strategy to enhance its global reach

by complementing its services offerings and adding more clients. Silverline

completed a $39.2 million all-stock acquisition of US-based Internet technology

services firm SeraNova Inc in March this year.

Silverline's shareholders had, in July, approved the company's plan to issue

4.5 million American Depositary Receipts (ADRs) to acquire software services and

training firm CTC Corp and its subsidiaries in all-stock deal.

The spokesman did not comment on the reason for the change in plan and other

company officials were not available for comment. The ADRs of the New York Stock

Exchange (NYSE)-listed Silverline have lost nearly 62 percent in value since

June, when the CTC Corp acquisition plan was first announced. They ended Friday

at $1.41 at the NYSE.

According to its Web site, www.ecomserver.com, the New-Jersey-based software

products and services company specializes in interactive voice response and

computer telephony integration services. It has a software development center in

Hyderabad.

Silverline's shares were up 2.28 per cent at Rs 40.35 at the Bombay Stock

Exchange in early afternoon trade, while the benchmark exchange index was up

0.35 per cent.

Its board will also consider on Tuesday a proposal to change the terms of its

plan to allot preferential convertible warrants to a promoter company.

Silverline said it will seek approval to issue warrants convertible into 20

million shares instead of 10 million.

(C) Reuters Limited.