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Modi Xerox to raise Rs 864 million

Modi Xerox has decided to make a preferential allotment of equity to the promoters, ModiCorp and Xerox Corporation of the US.

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This will result in a cash infusion of Rs 864 million for the office automation major.

The joint venture partners have agreed to subscribe equally to the preferential allotment. They will further consolidate their holdings in the Delhi based company.

Xerox and ModiCorp have also decided to augment their holdings in two other joint ventures, Modi Xerox Financial Services and MX Software Services.

While Modi Xerox Financial Services is the financing arm of the company, MX Software Services is a closely held software and services company.

"While continuing to leverage the successful synergistic relationship with B K Modi and ModiCorp, Xerox will hold a substantial majority share in the combined entity and take the lead in setting strategic direction and ongoing management of operations," a company statement says.

The proposed preferential allotment is, however, subject to the approval of the shareholders. The company is holding an extraordinary meeting on February 11 to obtain the shareholders' nod.

"This is an integral part of the strategy to enhance market leadership by introducing state-of-the-art digital technology and continue upgrading the marketing and distribution infrastructure," Modi Xerox has said.

"Xerox, the world leader in document processing, believes that India provides priority growth opportunities. Pursuant to this belief, it is committed to making necessary investments in new product technologies and market development, at the instance of B K Modi," the statement says.

B K Modi is the promoter of the Indian joint venture partners, ModiCorp.

"The intention is to rationalise and streamline the three joint venture companies for greater efficiency and better customer focus," the statement adds.

- Compiled from the Indian media

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