ITC to spin off infotech business

CALCUTTA: Indian tobacco and leisure firm ITC Ltd will spin off its

information technology business into a subsidiary company, a senior company

official said on Wednesday.

"As a separate organization, our customers will see us as a focused IT

company. To that extent, the focus comes in and all the synergy comes in,"

chief executive ITC information system division Sanjay Verma told Reuters.

He said the new subsidiary would merge the information services division

along with ITC's UK-based subsidiary ITC Infotech Ltd. ITC Infotech's subsidiary

in the United States will also be merged with the new subsidiary, Verma said.

The move to spin off the business as a separate company was taken by ITC's

board on Wednesday.

"We have intimated the stock exchanges about the board clearing a

proposal to seek shareholders' approval to restructure this business as a

subsidiary company," ITC's head of corporate communications SH Venkatramani

said.

A statement from ITC said that the company's information technology business

had realigned its portfolio to focus on growth areas. "It is gearing up for

a strong thrust into e-commerce software solutions, which will complement its

existing business lines of ERP, groupware and client server technologies."

On Monday, ITC Infotech signed an agreement with Compaq India for joint

efforts to explore opportunities in depolying e-enabled solutions.

In February, British e-commerce group Infobank International Holdings Plc

said it had entered into an agreement with ITC Ltd. to provide business web

services.

In March, ITC Infotech also signed a wide-ranging agreement with ExpandIT of

Denmark for software products.

The core business of ITC, which is 31.7 per cent owned by British American

Tobacco Plc, is tobacco. It also has interests in hotels and agri-products.

(C) Reuters Limited 2000.