The Hindu : Promoters to buy SSI's offshore centre

Online edition of India's National Newspaper
Wednesday, Oct 29, 2003

Business

Business

Promoters to buy SSI's offshore centre

By Our Staff Reporter

CHENNAI OCT. 28. With no suitors queuing up for the offshore development centre of SSI, the promoters of the company — Kalpathi S. Suresh and his ilk — have decided to buy it themselves. The company, it may be recalled, had openly solicited bids for the ODC and even quoted a floor price of Rs. 97 crores. The Kalpathi family has decided to buy the ODC itself. The family is negotiating with Union Bank of India to raise funds to buy the ODC.

According to Mr. Suresh, Chairman and CEO, the funds generated from the ODC sale would be used for repaying the debts of SSI, which had spent about Rs. 90 crores to develop the ODC. SSI had a debt of Rs. 170.14 crores as on June 30, 2002. The balance debt, after the sale of the ODC, will be repaid from accumulated cash on hand, thereby making SSI debt-free. SSI, he said, was planning to spend nearly $2 million on sales and marketing in the remaining part of the year. He said the company had been holding parleys with various companies in India, Singapore and the U.S.for acquisition.

Board restructured

Meanwhile, the SSI board had been restructured. The 12-member board had been pruned to 8. This followed the company's recent restructuring exercise wherein its education and training business was sold to Aptech (a recently acquired company), leaving SSI a pure play consulting and software entity.

Mr. Suresh will continue to be the Chairman and CEO. Kalpathi S. Aghoram would be the Vice Chairman and Managing Director. The four members who had relinquished were: S. S. Gopalakrishnan, Sashi Kumar Menon, T. K. Bhaskar and K. Vaitheeswaran. In another development, the company had appointed Ernst and Young for U.S. GAAP audit for the financial year 2003-04 beginning October 2003.

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