NIIT to raise $23 million from market

By siliconindia staff writer   |   Monday, 31 May 2004, 07:00 Hrs
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MUMBAI: NIIT is planning to raise Rs 100 crore through equity or debt for investing in its software and training business, which it decided to separate last year. The NIIT board approved in December '03 a scheme to spin off its software solutions business into a separate company called NIIT Technologies (NTL).

As a result, 75% of the equity share capital of the new entity will be held by the shareholders of NIIT and the balance by the demerged NIIT through a wholly owned subsidiary. The scheme involves demerger of the global software solutions business of NIIT into NTL while retaining the global education, learning solutions, knowledge solutions and education software business in the demerged NIIT.

NTL has 2,300 professionals and is expected to be listed in August. NIIT will hold 25% in NTL and all NIIT shareholders will get shares in NTL as part of the company's plans to demerge its businesses. "NIIT plans to use the investment over three years to grow both the businesses," said NIIT CEO Vijay Thadani. Both the companies can raise money from the overseas market, a possibility which we might explore then, Mr Thadani said.

NIIT's current order book value stands at $180 million. The proposal for capital and reserves allocation entails allotment of 50 shares of the demerged NIIT and 75 shares of NTL each at a face value of Rs 10 for every 100 shares of Rs 10 each held by the existing shareholders of NIIT.

The restructuring would also involve a change in the top management. Following Pradeep Narayanan's exit, who quit to join call centre company 24/7, Suren Singh would look after the learning business.

Thadani will be CEO of the demerged company, while Arvind Thakur, who currently heads the software services business, will be CEO of NTL

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