Software unit spin-off is fine, says NIIT board

By siliconindia staff writer   |   Monday, 29 December 2003, 08:00 Hrs
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NEW DELHI: The NIIT board has approved the draft scheme of arrangement to spin off its software solutions business into a separate company which will be named as NIIT Technologies (NTL), reports an Indian daily.

Consequent to the restructuring in the company, which is involved in education and software businesses, 75% equity share capital of the new entity will be held by the shareholders of NIIT and the balance will be held 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. The proposal for capital and reserves allocation entails allotment of 50 shares of 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 current shareholders of NIIT.

The board of NIIT has also constituted a committee of directors to execute formalities associated with implementation of the scheme including necessary filings and seeking approvals where necessary. The proposal to spin off the software solutions business was made public in October and according to the company was ‘to accelerate growth in the two businesses — education and software’. The formalities are expected to be completed by next June.

NIIT Technologies opened its seventh development centre in Delhi which has a capacity of 300 professionals and has taken its total workforce of software professionals in the city to 2,100. The company currently has a total strength of 2,300 professionals.

Over the next few months, the company would add 100 professionals each in Bangalore and Kolkata centres. NIIT had posted a 178% rise in its consolidated net profit for the quarter ended September 30 to Rs 3.8 crore. IT services contributed Rs 141.4 crore and learning business contributed Rs 123.6 crore.

(Source: ET)

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