PSEL sells unit for $ 205 mn

PSEL sells unit for $ 205 mn
ENS ECONOMIC BUREAU

CHENNAI, JANUARY 6: Pentafour Software & Exports Ltd (PSEL) will receive $205 million from Pentafour Communications Ltd for sale of its software business division to PCL.

PSEL chairman and MD V Chandrasekaran said PCL will pay around 30 per cent in cash and 70 per cent in shares towards this acquisition. The payment is to be completed within 120 days. At the EGM held in Chennai on Thursday shareholders approved the resolution seeking sale of PSEL's software business division to PCL.

Chandrasekaran speaking to media persons later said valuation was done by PricewaterhouseCoopers after taking into account several factors including brand value of Pentasoft, ongoing onshore and offshore projects as well as intangible assets and manpower resources. He said PSEL will deploy funds acquired from PCL in expanding its core focus area which will be in multimedia and Internet broadcasting. It will also be used for pure entertainment business related activities like production of animation films, home video, TVU,Music, broadcasting, content creation, pay market cable channel etc.

PSEL's shareholding in PCL after allotment of shares will amount to 30 to 35 per cent. PCL is expected to give 10 million equity shares to PSEL to complete the deal. Chandrasekaran said the decision to sell the software business division was recommended by the consultants after an restructuring exercise lasting 18 months. As a part of strengthening its core activities, the company will continue its acquisition of entertainment-driven companies in Japan, Australia, Europe and the US.

It has already acquired Animasia International Pte Ltd, Singapore and Kingdom Animasia Inc in Manila. Both these companies are now subsidiaries of PSEL. PSEL is in for a name change after having hived off its software business division. It is awaiting clearance from the Registrar of Companies, he said. PCL will raise $75 million through ADR/GDR to part fund its acquisition of software business division.

As for PSEL he said it has applied to the RBI toprepay its GDR debt of around Rs 55 crore. The Union Government has recently allowed companies to prepay its overseas debt. He expects to do this before end of March this year. Meanwhile, the shareholders of PCL have cleared company's decision to raise upto $75 million through ADR/GDR.