ICNET plans to enter healthcare biz

ICNET Limited (ICNET), a Chennai-based telecom technology company that had gone bankrupt in 1998, is planning to transform itself into a healthcare product company using a Rs 50-lakh revival package sourced from three of its unsecured creditors.

To come out of bankruptcy, ICNET has converted some of its unsecured debt to equity, and also promised to repay a portion of secured debt over a seven-year period, C Padmanabhan, chairman and managing director of ICNET, told a press conference here on Tuesday.

The company had converted Rs 14.97 crore of unsecured debt into equity valued at Rs 10 per share and a premium of Rs 20 on the directive of the Madras High Court. The unsecured creditors include Wipro Finance and L&T Finance.

It has a secured debt component of Rs 3.3 crore which is payable to Tamil Nadu Industrial Investment Corporation Ltd (TIIC) over a seven-year period starting March this year.

More money in the form of equity capital to the tune of Rs 1 crore is to be raised when Padmanabhan dilutes his stake. Following the dilution, the company is poised to have enough working capital for the next six months.

Post the revival package, the promoter's stake is reduced from 43.87 to 39.34 per cent and the public's stake from 49 per cent to 31 per cent, while the rest is held by the unsecured creditors.

"The court had given the debtors three options-to waive interest and convert debt into equity, waive interest and reschedule outstanding or not waive debt and reschedule or convert to equity. They chose the first option," said The Madras High Court also directed ICNET to resume trading at Central Depository Services (India) Limited (CDSL) and BSE which was started in August, 2004.

As part of its effort to bounce back, ICNET has signed an MoU with a US-based company to become its sole selling agent in India of their subscription based electronic medical records service (EMR Plus) which it plans on launching in March, 2005.

The service will provide value additions like assistance in emergency anywhere, in-patient procedure, pre-natal and post-natal guidance, infancy management, general healthcare.

ICNET that had started providing e-mail services in 1992 had gone into liquidation in 1998 after one of the debtors filed a petition in the Madras High Court. This was after it had suffered mounting debts when the Department of Telecom (DoT) had severed its connectivity in 1996. It had then employed 2,000 individuals in 23 offices in India and seven overseas offices.