InfoTech Enterprises, a Hyderabad-based software company, has decided to allot 12 lakh equity shares and three lakh convertible warrants to Pratt & Whitney, a division of the US-based United Technologies Corporation. The company is aiming to raise around Rs 48 crore through the issues.
As per the terms decided by the board of directors, the equities will be issued at $6 per share of face value of Rs 10 each, and the warrants will be issued at $10 per warrant. Each warrant will be converted into one equity share at the end of 18 months after the date of allotment.
The company has decided to convene an extraordinary general meeting on January 10 to seek the approval of the shareholders for the preferential offer to Pratt&Whitney.
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The preferential issue proceeds will be utilised by the company to finance its acquisition plans, working capital requirements and capital investment. Sources said the company has identified two-three target companies in the US for buyout and negotiations are on with them. The company has acquired two companies in Europe in the first quarter of the current year, one in the UK and other in Germany.
Post-preferential issue, InfoTech's equity capital will increase to Rs 7.3 crore from the exiting Rs 6.12 crore and the US company will hold around a 18.4 per cent stake in the company.
Pratt & Whitney has shown keen interest in making a strategic investment in InfoTech after its long association with the company, a company official said.
InfoTech currently provides engineering services such as aircraft engine parts design, analysis, CAD-related software and e-business services to Pratt & Whitney with around 15-18 per cent contribution to the total revenues.
The company has also decided to issue around 5,75,000 equity shares to the employees of the company and employees of its subsidiaries under an employees' stock option (Esop) plan.
For the half-year ended September 30, InfoTech has posted a net profit of Rs 9.48 crore on a total income of Rs 44.9 crore.
Meanwhile, the company's shares closed 16 per cent higher on both the Bombay Stock Exchange and the National Stock Exchanges at Rs 328.65 and Rs 333.1, respectively, today.