VisualSoft stock swap ratio gets nod

To issue shares to equity shareholders of AppLabs, eSolutions

VisualSoft Technologies Limited here on Wednesday announced the stock swap ratio envisaged under the scheme of amalgamation of AppLabs Technologies Private Limited and eSolutions Private Limited with the company.

As per the swap ratio approved by the company's board, VisualSoft will issue 17 equity shares of Rs 10 each for every six shares held by the equity shareholders of AppLabs and one equity share of Rs 10 to the shareholders of eSolutions for every six shares held by them.

In the case of preference shares, VisualSoft will issue 0.42 shares of Rs 10 each for every share held by the preference shareholders of AppLabs.

Following the issue of the above shares, the subscribed and paid-up capital of the merged entity would be 3.32 crore equity shares of Rs 10 each aggregating Rs 33.29 crore. Prior to the merger, the paid-up capital comprised 19.97 equity shares amounting to Rs 19.97 crore.

VisualSoft has also decided to realign its business on two key areas, which would act as major growth drivers for the company. The two areas are product development services in which the company is already strong and software testing services in which AppLabs is a market leader.

As part of this restructuring exercise, the company has either reduced or eliminated various other low profitability businesses, according to a VisualSoft press release here on Wednesday.

Consequent to the merger and realignment of business, VisualSoft is expecting to achieve a turnover of about Rs 240 crore and a profit of Rs 32 crore during the current fiscal. Prior to the merger, the company anticipated a turnover of Rs 150 crore and a profit of Rs 20 crore during 2005-06.

Visualsoft has also informed that it is targeting a turnover of Rs 400 crore and a profit of Rs 70 crore during 2006-07.

The company expects to achieve a turnover of around Rs 180 crore in product development services and Rs 220 crore in software testing services. The company intends to continue its merger and acquisition strategy to meet its targets.