SSI to raise $100m through GDR of $10 each

CIOL Bureau
New Update

BANGALORE: The shareholders of SSI Ltd., the Chennai-based software education

and development company, have approved the company's plans to raise $100 million

by issue of global depository receipts (GDRs).


The company plans to offer upto 10 million GDRs of $10 each to raise $100

million and this would be listed on the London Stock Exchange (LSE) during

mid-March 2000, said SSI Ltd. chairman and CEO Kalpathi S. Suresh. Merrill Lynch

has been appointed as the sole book-runners of this offering and Deutsche Bank

will be the custodian for the issue.

Mr Suresh also said that, it had been decided to raise money through the GDR

route due to time and valuation considerations. "We are committed to a

listing of our shares on the Nasdaq at a later date,'' he said. According to

him, the company was primarily seen as a software education and training firm,

with over 80 per cent of the revenues coming from this segment. "Once we

establish ourselves as an IT solutions company, we will get a better valuation

in the American capital markets,'' he added. The company plans to make use of a

major part of the funds to develop infrastructure for setting up an offshore

development centre that will cater to the requirements of SSI Technologies.

With the recent acquisition of Indigo Technologies, and its strength in

Tandem platform based software for the securities trading markets, the company

is set to execute a few projects for the Nasdaq. The company's new joint venture

formalized with Nasdaq - Indigo Markets - will source software from SSI

Technologies for NASD Japan and NASD Europe. The venture will have an equity

base of $1 million. The size of the projects, in terms of revenues, is not

known, but it is estimated to be in the region of Rs 100-150 crore.

SSI is in the process of establishing its own offshore development centre

(ODC) in Chennai, for which it is evaluating possible sites. The site is

expected to be operational by the first quarter of 2001, according to Mr Suresh.

NASD Japan is expected to go live, with trading stations and live quotes on

stocks, by the first quarter of 2001. "Executing these two projects is of

prime concern to us now, and also the time to market for those new exchanges,''

Mr Suresh said.

He said that SSI was looking at further acquisitions of companies mainly with

either product base or client base. SSI has acquired three companies so far. The

proceeds from the GDR issue would be used to complete the ODC and for business

expansion through acquisitions and joint ventures.