Singapore firm invests $7.6 m in Accel

CHENNAI: IT solution provider Accel ICIM, based in Chennai, has entered into a joint venture with Singapore-based Frontline Technologies Corporation Ltd. According to this agreement, Frontline will invest $7.6 million in Accel, out of which $ 4.4 million will be injected into Accel ICIM to expand its IT and BPO business and to increase its working capital. The remaining $3.2 million will be used to purchase shares from the prior investors and for the retirement of some loans.

Delineating the joint venture, Accel ICIM Chairman NR Panicker said that over the past two years the company had been showing some slowdown due to some investment in its various projects. "We are planning an aggressive expansion of our BPO/ ITO services through organic as well as inorganic route. Hence, we have been in talks with Frontline Technologies for the past one year. This partnership is not just a financial partnership, but this joint venture will enable Frontline to sell its IP in India, and we in turn can sell our IP in our geography. Besides it will reduce our debt by 50 percent," remarked Panicker.

This equity investment in Accel will not bring any change in the management in Accel, though Frontline will hold 41.9 percent stake in Accel and Accel and Intel will hold the rest.

"We were surprised that even though Accel ICIM is an unlisted company, we found it very transparent," said Frontline Technologies Corporation president and CEO Chin Hu.

With this partnership, Frontline will draw upon the lower cost development talents in Accel for regional projects. "Besides Accel will be the ODC for Frontline Group as such, and it will provide an offshore IT base for Frontline's regional ITO/ BPO operations," added Hu. Accel will also harness the e-Government solutions and IT security solutions from Frontline for customers in India.

(CyberMedia News Service)