Grasim hives off software division

By Our Staff Correspondent

MUMBAI, NOV. 29. Grasim, the flagship of the Aditya Birla group, is hiving off its software division - Birla Consultancy Software Services (BCSS) - as a going concern into a separate wholly owned subsidiary of Grasim.

A decision to this effect was taken by the board of directors of Grasim here today. The move is part of the restructuring process, aimed at enhancing Grasim's shareholder value, through a greater focus on its two major business segments, namely, viscose staple fibre and cement.

The subsidiary company, Birla Technologies (BTL), will focus exclusively on the information technology business, to ensure long term growth in this highly competitive industry. BTL will offer specialised end-to-end solutions in web technologies, e- business applications and e-learning. Its intent is to be a niche player in key service sectors such as financial services, mobile and e-commerce, and telecom.

The business of Grasim's software division has been valued at Rs. 29.4 crores as a going concern by Bansi S. Mehta and Company. It is proposed to be paid in the form of equity shares to Grasim. The paid up capital of BTL will be Rs. 9.8 crores with a share premium of Rs. 19.6 crores which will be held by Grasim.

Grasim will seek shareholder approval for transferring this business at an extraordinary general meeting to be held on January 6 next. Necessary regulatory approvals are being sought to effect this arrangement.

The turnover of the software division was Rs. 28 crores for the fiscal year 2000 with a negligible profit. All the strategic alliances that Grasim's software division had entered into will also be transferred to the proposed subsidiary.

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Section  : Business
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