The Hindu Business Line : VisualSoft, Applabs, eSolutions merger plan falls through

The proposed amalgamation of IT services company VisualSoft Technologies Ltd with Applabs Technologies, a software testing solutions provider, and eSolutions, has fallen through.

The scheme of amalgamation charted out by the board of directors, at a meeting held on October 27, 2005, has failed to materialise and the companies have decided to pursue their interests independently. As per the proposals, they would have become one entity by the end of this fiscal, subject to regulatory approvals.

Consequent to the withdrawal of the amalgamation scheme, which was getting delayed in terms of obtaining approvals, the VisualSoft board felt that the proposed scheme of amalgamation shall not be pursued further. Mr Sashi Reddi, Chief Executive Officer of Applabs, and currently CEO of the combined entity, has resigned, and this was accepted by the board which met here on Friday. Mr Reddy could not be reached for his comments.

The Chief Financial Officer of VisualSoft, Mr V. Krishnan, told Business Line "the undue delay in concluding the amalgamation has led to the current situation. This is disappointing, but we continue to hold the same guidance of Rs 150 crore of revenue and Rs 20 crore in profitability on a standalone basis."

Following this development, the company has filed necessary applications with the stock exchanges for obtaining in-principle approval, in terms of clause 24 (f) of the listing agreements and the approval is awaited.

On Friday, the scrip ended lower at Rs 139.45, down 22.20 per cent over the previous close at the NSE.

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