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| Subex to raise funds from client's arm |
| BS Reporter / Chennai/ Bangalore Aug 12, 2010, 00:50 IST |
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Telecom software product firm Subex is planning to raise up to Rs 64 crore by issuing about eight million equity shares to Rayed Holding & Finance S A, the investment arm of a telecom firm which is one of its clients. The shares would be issued for a price of Rs 80 per equity shares and the fund proceeds will be utilised to part-repay the debt of the company which is about $36 million, Subhash Menon, founder chairman, MD and CEO, Subex, said.
The company, however, did not disclose the name of the telco and the quantum of revenue Subex derives from it. With this issue, the promoters’ holding in the company will come down to about 13 per cent from the present 14 per cent.
Menon said the company was viewing this as a strategic investment wherein “other than money, they will help our business to grow further”.
“This investment from an entity that understands the telecom software sector well vindicates our stand on the bright future of the company. They were particularly impressed with our positioning and strategy around revenue operations centre (ROC) and managed services. The fact that they are investing at a price that is significantly higher than the current market price establishes their confidence in the company,” said Menon in a statement.
Subex posted a 93 per cent drop in its consolidated net profit for the quarter ended 30 June, 2010 to Rs 2.52 crore when compared with the same period a year back. The net profit for the quarter was primarily impacted by exceptional items to the tune of Rs 14.51 crore owing to the re-adjustment of FCCBs and settlement of foreign currency loans and advances.
Subex’s outstanding FCCBs is at $94 million. Subex’s stock closed at Rs 58 on Wednesday up 4.3 per cent.
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