VisualSoft calls off merger

VisualSoft Technologies has called off the proposed scheme of amalgamation of AppLabs Technologies and eSolutions Pvt Ltd with the company. The boards of the companies had earlier given their consent for the amalgamation on October 27, 2005.

According to a press release, since the proposed scheme of amalgamation was held up owing to delays in obtaining approvals from appropriate authorities, the boards felt that it shall not be pursued further.

As all the three companies were operating in the fast growing IT sector such delay will not benefit the planned synergised growth, the release added. Accordingly, the board of directors in its meeting held today decided to withdraw the scheme of amalgamation with immediate effect.

Consequent to the withdrawal of scheme of amalgamation, Sashi Reddi resigned as chief executive officer (CEO) of VisualSoft, which was accepted by the board with immediate effect. AppLabs CEO, Sashi Reddi was appointed as the CEO of VisualSoft with effect from November 1, 2005.

According to VisualSoft's chief financial officer V Krishnan, it's going to be business as usual for the company even after the withdrawal of the scheme of amalgamation.

"We had decided to amalgamate six months back and since all the three companies work in a sensitive industry, the delay was affecting our business plans," he added. With regards to who will be the new CEO of VisualSoft, Krishnan said nothing was finalised as yet.

At the time of announcing the proposed amalgamation, it was said that the combined entity was targeting to end this fiscal with a turnover of $70 million followed by $100 million in 2006-07.

While AppLabs was expected to contribute $22 million this year, eSolutions was expected to contribute around $1.2 million and VisualSoft $46.8 million. The combined entity would have had an employee strength of around 1,800, serving more than 400 active customers globally.