Bell South To Place Shares With Webel Comm Of Canada

Bell South Enterprises (BSEL), a Mumbai-based software company, plans to privately place equity shares on a preferential basis to Webel Communication, a $30-million Canadian software company.

BSEL proposes to issue around 2 million equity shares at a premium yet to be decided. Kirit Kanakiya, managing director, BSEL, said the Canadian multinational is willing to pick up the stake at around $1.75 per share, which in rupee terms works out to around Rs 70 per share. However, BSEL is expecting a higher premium. Webel has its main strength in software for Internet applications and has business interests in other high-growth areas like Year 2000 solutions, enterprise reso-urce planning and multimedia.

With this tie-up BSEL will have a base in the overseas market, while Webel will be able to utilise BSEL facilities to develop software at lower prices.

BSEL had come out with a public issue in August 1996. Earlier, the company's main activities included trading of software, hardware and peripherals that found applications in personal and office use. BSEL's earlier performance has also not been up to mark due to the poor state of the hardware industry.

However, in the last one year the company has increased its thrust in software development which has made it necessary to have a global partner.

The company's software venture commenced operations on April 2, 1998. In the first month, the company had sales of around Rs 25 lakh, and in the current month it expects a turnover of Rs 75 lakh. It has launched a new software called 'E-trade', a trading module used by mutual funds and bankers.

The company is also executing a Y2K project for a multinational company. Kanakiya said that the company is operating on high margin products and expects the operating margins to be over 75 per cent.