Canadian bank to stake claim in Subex

BANGALORE: Canada's Toronto-Dominion Bank is in the process of buying a three

percent equity stake in Indian telecoms software firm Subex Systems Ltd, the

company's chairman Subhash Menon said on Thursday.

Menon told Reuters that the Canadian bank would buy fresh equity to be issued

by the firm, and that this would be in addition to any other stake it may

already have as a portfolio investor. He said he had no details on the portfolio

investments.

"Nobody (from the current stakeholders) is selling. The company is

selling," Menon said, adding that the bank would hold three percent in the

firm after the issue of the equity. Though he stated that the deal was still

being worked, Menon offered no details on the pricing of the deal.

He said the bank was buying the stake as part of a deal under which Subex

acquired the software product assets of Canada's Magardi Inc in May. The bank

was the secured creditor for Magardi, and the sale involved cash and stock

deals, he said.

The Economic Times reported on Thursday that Toronto-Dominion was set to

raise its overall stake in the company to more than nine percent from 6.2 per

cent. The newspaper, citing unidentified sources, said the bank would buy around

220,000 shares at Rs 110 a share, which are about 125 per cent above the current

market price.

Subex, which specializes in the slowdown-hit telecoms sector, reported a

three percent drop in net profit to Rs17.60 million in the April-June quarter,

while sales rose to Rs143.8 million ($3.05 million) from Rs 128 million, a year

ago.

(C) Reuters Limited 2001.