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BFL Soft plans acquisitions, expansion

BFL Software Limited has decided to raise $100 million from foreign markets to meet the capital expenditure and working capital requirements of its massive expansion and acquisition programmes.

The amount will be raised through issue of shares in overseas markets in foreign currencies at an appropriate time. The shares will then be listed to New York Stock Exchange or NASDAQ or any other international stock exchange, the company said.

BFL Software, to be renamed as Mphasis BFL Limited, has drawn an ambitious plan to expand its business activities both in India and abroad and plans to increase its domain expertise and diversify into high potential emerging areas of the information technology business.

The company plans to grow through acquisitions, mergers, joint ventures and strategic alliances, both in India and abroad, apart from expanding and upgrading its existing development facilities as well as creating new facilities and expanding its geographical reach by setting up marketing and representative offices across the world.

Though the type of instrument that will be used for raising $100 million was yet to be decided, it is believed that the company will either take the American depositary receipts (ADRs) or the global depository receipts (GDRs) route.

The company will seek shareholders approval to these effect in the forthcoming annual general meeting on July 24.

This apart, it will also seek approval for acquiring and holding of equity shares of the company by foreign Institutional Investors, overseas corporate bodies and Non-Resident Indians up to an aggregate limit of 40 per cent of the paid-up equity share capital as per new SEBI regulation.

Incidentally, BFL Software had recorded about 98 per cent drop in net profit in 1999-2000 to Rs 4.4 million from Rs 250.6 million in 1998-99 for which its chairman Rahul Bhasin explained that a number of factors coincided simultaneously.

Marketing expenses more than doubled during the year and the benefit of this did not translate to the company during the same account year, he said adding the company charged the entire marketing expenses to the profit and loss account. Manpower costs rose by 16 per cent on one hand while manpower utilisation dropped by 15 per cent during the year.

However, acquisition of Mphasis Corporation Inc will save the company $1 million in office costs per year as it has offices in New York, London, Singapore and Tokyo and will help increase utilisation of manpower, Bhasin claimed.

The company specialises in the delivery of a variety of IT solutions for large and reputed clients the world over and nearly 85 per cent of its Rs 1.23-billion revenue last year came from the US.

UNI

Money