Polaris-OrbiTech merger gets board approval

Sudarshana Banerjee

NEW DELHI: The long pending Polaris-Orbitech merger has finally got the approval of the Polaris board. In a special Emergency General Meeting, shareholders have voted in favor of the merger. The total enhanced share capital of the merged entity is expected to be approximately 97 million shares and are expected to be issued and listed in the BSE, NSE and MSE.

Post-merger, 42.65 shares of Polaris would be swapped for 100 shares of OrbiTech. As a result, existing Polaris shareholders will own 52.75 percent and Orbitech shareholders will own 47.25 percent of the merged company. It is interesting to note that CitiCorp will have a 47 per cent holding in the merged entity by virtue of its original stakes of 6.25 per cent and 93 per cent in Polaris and OrbiTech respectively.

Speaking to CNS, Raghuraman Balakrishnan, Vice President with Polaris, informed that of the total 47 per cent share of CitiCorp, it would have voting rights on only 29.9 per cent, the remainder 17.1 per cent would be in custodial. "If CitiCorp tomorrow decides to sell off 5 per cent stake, then the remainder shares from the custodial will take its place. At no time will CitiCorp have more than 29.9 per cent voting rights within the new company." The role of CitiCorp will only be as a financial investor, he adds.

Arun Jain, Chairman, MD and CEO, Polaris Software Lab Limited, will assume the same position in the merged entity.

Will there be any retrenchments? "There will be no trimming down," informs Balakrishnan. Both Polaris and OrbiTech operate in niche segments. While they were a mainly tech subsidiary we have a major global presence; our strengths are mostly complimentary and it will be a consolidation. There would be some overlap in the tech department but we have enough clients and orders in hand."