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Friday, Feb 27, 2004

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Geometric to invest Rs 2.25 cr in US co

Our Bureau

Mumbai , Feb. 26

GEOMETRIC Software Solutions Company Ltd has entered into an agreement with the Detroit-based Virtual Supply Chain Engineering Inc (VSCE) to make an investment of up to $5,00,000 (Rs 2.25 crore) in its 9 per cent non-convertible preference shares.

In an announcement informing the Bombay Stock Exchange of the investment, Geometric said it would make an initial investment of $2,00,000 on signing the agreement.

A company official said the agreement would be based on the partnership model and would leverage the strengths of the company's Bangalore-based engineering services division.

Geometric, she said, had been looking at entering the field of design engineering. The partnership fitted in well with this objective, as the projects undertaken under the arrangement would be for the US company's automobile customers.

The US company, with its knowledge of the local market, would serve as the front end and promote Geometric's solutions in that country.

According to the BSE announcement, the balance investment would be made on VSCE achieving the specified targets of business benefiting the company from itself or its affiliates. The preference shares will have put and call options based on time and achievement of pre-determined business targets.

VSCE will also issue a warrant to the company to purchase 25,000 shares of common stock at $7.5 each with call option at $1 for the warrant on achieving pre-determined targets. The warrant will expire in five years.

Further, the company, subject to approval by its members in the general meeting, will offer VSCE 1,00,000 warrants convertible into an equal number of equity shares within a period of 18 months from the date of issue, on preferential basis to be priced in accordance with SEBI guidelines, the BSE announcement said.

VSCE is into diverse businesses such as onsite placement, process engineering, supply chain and design engineering.

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