Hughes Software Announces 2:1 Stock-Split

Hughes Software Systems (HSS), a General Motors-Hughes Network Systems company, has announced a stock-split in the ratio of 2:1. The meeting of the board of directors of the company which was held yesterday has approved this.

The split would mean a sub-division of each existing fully paid-up equity share of face value of Rs 10 into 2 fully paid up equity shares of face value Rs 5 per share, pursuant to Section 94 of the Companies Act, 1956. This is subject to approval by the shareholders.

According to Mumbai-based market sources, the splitting of HSS shares, listed on the domestic (Indian) stock exchanges, is a precursor to mergers and acquisitions which HSS has lined up and the preferred route will be stock swap.

 

Mumbai-based market sources said HSS has shortlisted about five companies, three here and two abroad, for possible M&A activities. Earlier this year, HSS had mandated PricewaterhouseCoopers and Kotak Mahindra to shortlist companies for acquisitions and strategic investments.

Out of the approximately half a dozen companies which have been shortlisted, one M&A is expected to be completed this year, sources said.

For the acquisitions, HSS is also looking at doing a deal envisaging stock swap instead of an outright cash deal.

According to the sources, the companies shortlisted by HSS for M&A activities are likely to be having synergistic products vis-a-vis HSS. The three areas which have been earmarked for such activities include e-commerce/ Internet/ new ideas, key technologies and new accounts. HSS, which announced its Q4 and year-end results on April 20, 2000, reported a 73 per cent growth in total income for the year 1999-2000 at Rs. 120.75 crore, up from Rs. 69.82 crore (on an annualised basis for the previous accounting period of 15 months).

This includes other income of Rs. 13.46 crore. The after-tax profit increased by 157 per cent for the same period, rising to Rs. 37.70 crore from Rs. 14.66 crore (on an annualised basis for the previous accounting period of 15 months).

The company recorded 96 per cent growth in total income for the quarter ending March 31, 2000 (Rs. 36.00 crore, up from Rs. 18.36 crore for Q4 in 1999).

This includes other income of Rs. 2.72 crore. The profits for the quarter ending March 31, 2000 rose 302 per cent (Rs. 11.99 crore, up from Rs. 2.98 crore for Q4 in 1999).

The paid-up equity share capital of the company has increased from Rs 630 lakhs to Rs 1663 lakh.