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Saturday, Dec 28, 2002

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Goldstone picks up stake in US firm

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GOLDSTONE Technologies Ltd, the Hyderabad-based software services company, has decided to invest in a Nasdaq-listed US software company and has already picked up a 10 per cent stake. The company has the option to further invest and pick up another 10 per cent stake.

The board of directors of the company, who met here on Friday, cleared the proposed investment plan that is subject to RBI and other statutory approvals. This is aimed at forging a strategic long-term relationship. The target US company focuses on banking, insurance and healthcare verticals and has several Fortune 500 clients.

The Executive Director of Goldstone Technologies Ltd, Mr K. Vasudeva Rao, told Business Line that the last two years were challenging for both the companies. While we had huge capacity but fewer orders, the US company had orders but was finding services costs higher and was looking at leveraging offshore capability. This match provides an opportunity for both of us to leverage each other's capabilities.

While refusing to divulge the name of the company at this stage since it has signed a non-disclosure agreement with the target company to carrying out the due diligence from both the sides before entering into strategic relationships, Mr Rao said and maintained that this will be revealed at an appropriate time as the US SEC norms are very firm about this.

The company board has also decided to allot 50,00,000 warrants at Rs 27 per equity warrant to the promoters of Goldstone. This is planned to meet the proposed inorganic growth of the company and support its investment strategy.

Recently, the company had launched Forte to Java migration tools for the global market.

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