The Hindu Business Line : Megasoft to merge with Xius India

(From left ) Mr Jan Erik Boers- Chairman, Xius India Ltd, Mr Ravindra Sannareddy, Chairman and CEO, Megasoft, and Mr G.V. Kumar, CEO, Xius India, at a press conference in Chennai on Friday. - - Bijoy Ghosh

Chennai , Feb. 6

MEGASOFT Ltd on Friday formally announced its merger with Xius India Ltd. The board approved the merger about a fortnight ago.

Addressing the press, Mr Ravindra Sannareddy, Chairman, Megasoft Ltd, said that the existing shareholders of Megasoft would own 60 per cent of the new entity, which would retain the name Megasoft, while the remaining would be held by Xius India shareholders.

The i-Labs group, which holds stakes in both companies and which is promoted by Mr Srini Raju, would now hold a 20 per cent stake in the merged entity, which is looking at revenues of between $20 million and $25 million for the current fiscal.

Mr Sannareddy would continue as Chairman while the Chairman of Xius India, Mr Jan Erik Boers, would be Co-Chairman post-merger. Megasoft currently has about $4 million of debt while Xius is a debt-free company.

ProLease, a company in the business process outsourcing arena, holds a 13.5 per cent stake in Megasoft prior to the merger.

Mr Sannareddy clarified that ProLease does not currently have plans to invest further. He also revealed that the company intended to expand its operations in Hyderabad where the government had allotted Megasoft six acres of land.

It may be recalled that the Megasoft board, on January 20 this year, had approved the proposal for merger with XiusIndia Ltd based on the valuation report submitted by PricewaterhouseCoopers Pvt Ltd. (PwC).

PwC recommended a swap ratio of five equity shares of Rs 10 each of the Company for every two equity shares of Rs10 each of Xius.

Based on the said swap ratio, about 10.3 million equity shares of Rs 10 each of Megasoft would be issued against about 4.13 million fully paid up equity shares of Rs 10 each, as on January 1 this year, of Xius India Ltd, subject to necessary approvals.

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