VXL to divest 29% to strategic investors

The Rs 60-crore VXL Instruments, makers of Thin Clients, will divest close to 29 per cent stake to three strategic investors for Rs 8.2 crore.

The investors will be led by Mumbai-based Priya Ltd, UK-based Daymount besides a high net worth individual L Agarwala. Priya is one of the suppliers to VXL while Daymount is a client of VXL.

VXL in the recent past has cash flow problems which the company has been ironing out systematically. This fresh infusion of funds will aid the company to turn around to a larger extent.

The company for the year 2003-04 reported a net loss of Rs 2.5 crore on a turnover of Rs 53 crore. It is expected to close the current fiscal at Rs 65 crore with a nominal loss of Rs 50 lakh.

VXL has a debt of around Rs 8 crore and in addition to fresh equity infusion the company is also in talks with financial institutions to restructure other debts.

A spokesperson for the company said: "There was severe cash crunch in the recent past which put a lot of strain on our operations. We have sorted out these issues and a key supplier Priya Limited has shown faith in our growth plans and has agreed to supply on deferred cash payment. Now they are picking up strategic stake in the company which is a further boost to our operations. On the domestic front, we should be getting orders worth nearly $10 million and an additional $15 million from our European operations."

The company has an order book which requires them to supply 22,000 Thin Clients. He further added, the company in its years of operations has built up technical support expertise and it will start offering this service to third party clients.

VXL, which recently gained the third position globally in the Thin Clients space, is also looking at entering the highly competitive US market, once the "operations stabilise".

"The US market for Thin Clients accounts for nearly 50 per cent of the market globally. We want to be present in this market," he added.