Japanese IT services company CAC Corporation will acquire 51 percent stake in the city based Accel Frontline Ltd and an open offer for public shareholders will be made soon, an official of Accel Frontline said Monday.
"CAC Corporation would acquire 51 percent stake in the Accel Frontline by acquiring the promoters' stake, subscription of new equity shares issued on preferential basis, and from open offer to public shareholders at a price of Rs.45 per share," N.R. Panicker, chairman, Accel Frontline told reporters here.
According to the officials, the Japanese (information technology) IT services company would be investing around Rs.130 crore -- around Rs.90 crore towards equity acquisition, and the balance as soft debt -- in the Indian company listed in the stock market.
"The money would be used to pay off high cost debts, and for business activities. The company (Accel Frontline) has a debt of around Rs.80 crore," said S.T. Prabhu, director, Accel Ltd, the promoter of Accel Frontline.
Panicker said that after the completion of open offer, acquisition of shares from the Indian promoters, the CAC Corporation would hold 51 percent in Accel Frontline.
The holding of Accel will come down to 24 percent from the current 65 percent, and the public holding will be at 25 percent, Panicker added.
Last fiscal, the Accel Frontline clocked a turnover of $67 million, and hopes to close the current year with a topline of around $78 million.
Malcom F. Mehta of the CAC Corporation said the company does not have any plans to delist the shares of the Accel Frontline after the deal, nor change its name.
However, there will be a change in the composition of Accel Frontline's board with the CAC Corporation's representatives in majority.
Speaking about the rationale for $400 million revenue CAC Corporation's investment Mehta said: "Japanese companies are looking to grow out of Japan in other geographies. With this investment we look at delivery capability globally."
He said the CAC Corporation looks at India and China as big markets.
"In India, there are lot of infrastructure projects coming up with Japanese funding and we would look at them for business," Mehta added.
