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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (8320)	10/13/1999 11:23:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

Merger rumours abound in Fujitsu-ICIM icil.co.in icil.co.in ======================= Sunita Nagpal (FE) New Delhi, Oct 12: With the shareholders giving a green signal to the sale of Fujitsu ICIM's systems and engineering division to Accel Limited, marketmen feel the stage is set for the merger of the company's software subsidiary, International Computers India Limited (ICIL), with the parent. In anticipation, the stock has gained by more than 142 per cent in the last 25 trading sessions. The scrip is currently trading at Rs 842.25 - an all-time high. Despite the rise in stock price and an unbelievable PE of 471, analysts feel the scrip has some more steam left and is likely to touch the four-digit figure soon. Earlier this year, the scrip had a dream run on the bourses on expectation of the merger of the software subsidiary with Fujitsu ICIM. In January, the stock zoomed from Rs 92 to Rs 652. However, with the two promoters -- RPG and Fujitsu of Japan - at loggerheads over the proposed division sale to Accel the market was doubtful over the future of the company. With the shareholders now approving the sale its systems and engineering services division to Accel Limited or its nominees, merger rumours have once again started doing rounds on the bourses. The sale is for a sum of Rs 11.5 crore. Accel will also have to take over Fujitsu ICIM's liability of Rs 10.15 crore under the existing lease arrangements of SES business. The acquisition will be effective from April 1, 1999. After the sale of SES division, Fujitsu ICIM will effectively be a shell company holding 75 per cent stake in ICIL. The balance 25 per cent in ICIL is held by Jardine Fleming Electra. The merger will provide Jardine with an exit route and bring the full potential of software operations to Fujitsu. ICIL is the only software engineering company in the world to have achieved Carnegie Mellon University's SEI CMM level 5 for all its projects, at all its sites. In addition, ICIL has also been accredited with the Level 2 of EFQM (European Foundation Quality Model) as a corporate business entity. ICIL's client list includes names like Informix, Cisco, British Gas, Sprint, Cap Geminin, Fujitsu and ICL (the UK). About 80 per cent of the business conducted by ICIL is on-site, with 80 per cent being repeat orders. ICIL has little exposure to the Y2K business and instead focuses on telecom, ERP implementation, projects related to migration and porting. As for future, ICIL plans to focus at e-commerce, not at the typical Internet-based tools, but creating Intellectual property, reusable components, developing products. These products are expected to hit the market by the year-end. For fiscal 2000 (ending March 31) ICIL is expected to reported a net profit of Rs 40 crore on an turnover of Rs 220 crore. About 75 per cent of ICIL's profits will accrue to Fujitsu. Fujitsu ICIM is also likely to announce results for the 12-month period ended September 30, 1999, soon. Analysts expect the company to clock a turnover of Rs 32 crore and a net profit of over Rs 4 crore. The scrip is currently trading at a PE of astonishing 367 times. ===================== ICIM International Inc - Corporate profile icim.com ICIM International Inc. (III) was incorporated in the state of California on July 2, 1991 with a capital investment from its parent organization, Fujitsu ICIM Ltd. (FIL). The headquarters of the US operations are in San Jose, California and the European operations are based in Bracknell, UK. III was started as the marketing and project delivery wing of FIL. But since late 1993, III has expanded its repertoire of services to include IT consultancy and professional services. It has grown to over 200 people with an annual turnover of $26million. In the US, it has offices in New Jersey and Kansas. III is a 100% subsidiary of International Computers India Ltd. (ICIL). ICIL is a subsidiary of Fujitsu ICIM Limited (FIL), which in turn, is a part of the Fujitsu Group, ICL Plc., U.K. and RPG Enterprises, India. On October 1st, 1996, FIL's software export business, which resided in its International Software Division (ISD) was transferred to ICIL, to provide the software exports business a distinct identity of its own. ========================