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SSI promoters buy out partners' stake in Buckingham Real Estate

Our Bureau

Chennai , Jan. 9

THE Kalpathi family, promoters of the Chennai-based SSI Ltd, has acquired 50 per cent holding of the Reddy family in the 70-acre Binny property for about Rs 100 crore.

They have also revoked the joint development agreement of the property with the Pune-based Runwal Group for a compensation of Rs 16 crore, according to sources in SSI.

The Buckingham Real Estate and Assets Developers (Madras) Ltd (BREAD), a residential-cum-commercial project on what used to be the Binny textile mills land at Perambur in Chennai, was a 50:50 joint venture between SSI promoters (Mr K.S. Aghoram, Mr K.S. Ganesh and Mr K.S. Suresh) and Mr G. Harichandra Reddy, Chairman of Green Park Hotel, Hyderabad, and his son Mr G.V. Prasad, CEO of Dr Reddy's Lab.

Following the acquisition from the Reddy family and settlement with the Runwal Group, SSI said that it would merge BREAD with the company.

The share swap ratio for the merger is 642 equity shares of the company for each share of BREAD. The share capital of BREAD comprises 50,070 equity shares. Based on the exchange ratio a total number of 3.21 crore fully paid equity shares of Rs 10 each of the company will be issued to BREAD shareholders. The appointed date of the scheme is March 31, says a SSI communication to stock exchanges.

As on December 31, 2005, the share capital of the SSI was Rs 17.71 crore. The promoters currently hold 45 per cent of the share capital of SSI before the proposed merger of BREAD. The projected revenue from the Rs 850-crore BREAD project is likely to be over Rs 1,500 crore over a six-year period. The company has obtained approval from the Chennai Metropolitan Development Authority for the construction, the source said.

SSI was predominantly in the software services and software training businesses. Its promoters have, however, exited both and have been building a land bank in and around Chennai in a bid to become a focussed realty company. The company has leased out 3.27 lakh sq ft of built up commercial space in the city to a software company with an annual rental income of Rs 13 crore. The company is also in the process of developing an additional 1.40 lakh sq ft within the Vadapalani complex. It also owns 37 acres of real estate on the East Coast Road, the source said.

The company holds 18.76 lakh equity share in Aptech Ltd and 10.52 lakh shares of Scandent Solutions. On the Bombay Stock Exchange SSI's stock price today closed at Rs 116.10.

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