Infosys Technologies is expected to pay close to Rs 220 crore (Rs 2.2 billion) for buying out shares and options held by around 1,000 employees of Infosys BPO.

The move has been necessitated after Infosys decided to convert the erstwhile Progeon (now Infosys BPO) into a subsidiary.

The company bought Citigroup's 23 per cent stake in this venture in April 2006. Citi had invested $20 million in 2002 to acquire 8.75 million shares, which are now valued at Rs 518 crore (Rs 5.18 billion).

Infosys will be paying Rs 604 per share for a total of 3.6 million shares - the same price that it paid to Citigroup.

Out of the Rs 220 crore (Rs 2.2 billion), Rs 69 crore (Rs 690 million) has already been paid for 1.1 million shares held by a section of the BPO employees. The remaining 2.5 million is held as options and the move to buy out these will be completed by March-end.

Infosys BPO currently employs a little over 10,000 and for the third quarter reported a topline of $40 million - a sequential growth of 20 per cent from $32 million. Margins have been maintained at 22.4 per cent levels.

Infosys said attrition levels, of over 30 per cent, is being brought down systematically and is making progress on this. On the other hand, Infosys Consulting has reported higher losses at $6.5 million for the third quarter ended 31 December, 2006 as against a loss of $3.5 million during the second quarter of FY07.

The revenues for this arm has moved up marginally by a million dollar at $13 million for the third quarter. The company once again said consulting continues to be in the investment mode and will take yet another 2-3 quarters for the arm to break even.