Subex Limited, a Bangalore-based software company, is raising Rs 48 crore through a preferential placement of shares. Subash Menon, who is the promoter and chief executive officer (CEO) of the company, has agreed to infuse the fund to increase his stake in the company.
Menon said in a release that the primary objective of this preferential placement is to raise his stake in the company. He currently holds 6.58% stake out of the total promoter holding of 10.46% in the company. Kivar Holdings Pvt Ltd, a holding company of the group, holds the balance 3.88% stake. Media reports suggest that the issue is likely to increase Menon's stake by 6%. Subex recently restructured its foreign currency convertible bonds (FCCBs), which upon conversion will further reduce Menon's stake.
Subex plans to utilise the fund in reducing liabilities including bank loans, it informed in the Bombay Stock Exchange.
The company plans to issue up to 6 million shares at Rs 80 a share to raise the fund. It further said that the shares will be placed exclusively with the promoter group, and the issue price is higher than the floor price of SEBI. The decision of the placement is due for
approval of the shareholders of the company.
Subex develops software products and also offers software consulting services. The products primarily focus on providing software solutions for clients in the telecommunication sector.
The shares of the company were traded at Rs 64.6, up by Rs 4.25 or 7.04% at 1:35 pm in the BSE. At current prices, the company has a market capitalisation of Rs 224.98 crore. Private equity firm UTI Ventures is an investor in Subex.
Subex has already expanded its presence across UK, USA, Canada, Dubai and Singapore. The two of its major acquisitions include UK-based Azure Solutions for $140 million in 2006 and Toronto-based Syndesis Ltd for $164.5 million in 2007.
The revenue of the company was Rs 311.1 crore in the financial year 2008-09, however, it incurred loss of Rs 178 crore in that fiscal.