Ramco spins off software division
By R.Ramasubramoni | 01 Jul 1999
The software division of Ramco Industries is being spun off as a separate company, Ramco Systems Ltd., with effect from 1 April 1999. This plan has been cleared by the company''s board and is pending approval from the Madras High Court, the Reserve Bank of India, financial institutions, debenture trustees, banks and shareholders, which are expected to be obtained by the end of the year.
Ramco Systems was established in 1989 to develop and market high-end enterprise application solutions. Its best known product is the enterprise resource planning software package called Marshall, which won plaudits from none other than Bill Gates when he was in India. This application is now installed in over 500 companies, according to the company.
As part of this move, Ramco Industries will receive shares in Ramco systems in the ratio of 1:1. The equity base of the new company and Ramco Industries'' value of holdings in the company, remain undecided as of now. However, no fresh equity is planned in the near future, while about 16 per cent is to be allotted for employees'' stock options.
The new company is targeting sales of about $40 million in 1999-2000. It is to acquire the software subsidiaries in Switzerland, Malaysia, Singapore and the US from its parent company for a price that is still undecided. These subsidiaries are estimated to be worth Rs. 72 crore.
Ramco is now involved in developing a software technology framework for software development that will be used in net-based business applications.
