WNS exercises option on BPO transfer to Aviva

In what is being seen as temporary relief for WNS (Holdings), the business process outsourcing (BPO) firm has informed the US Securities Exchange Commission (SEC) that it has exercised the call option given by Aviva Global Services to extend the date for transfer of the project and operations of its Pune facility to Aviva - from January 1, 2008 to April 1, 2008.

Moreover, the call option notice period has been reduced from three months to one month which means that if the option to transfer the Pune facility is exercised by Aviva on April 1, 2008, WNS would be required to transfer the Pune facility to Aviva on May 1, 2008.

The move follows media reports that suggested Infosys, the country's second-largest IT services provider, had offered to buy Aviva for around Rs 300 crore.

WNS had established a wholly-owned subsidiary in Pune, Ntrance Customer Services, in February 2004 which provided BPO services exclusively to Aviva, which had similar agreements with EXL Services and 24/7 Customer. For financial years 2007, 2006 and 2005, the Pune facility accounted for 5.2%, 6.5% and 5.1% of WNS' revenue respectively, and 8.3%, 8.8% and 8.4% of its revenue less repair payments (a non-GAAP measure that is calculated as revenue less payments to automobile repair centres) respectively.

In August 2006, Aviva had said it wanted to consolidate these BOT centres into its newly-formed offshore services arm -  Aviva Global Services. As a part of the business arrangement with Aviva, WNS granted it the option to purchase Ntrance shares.The option was exercisable by Aviva at any time - on or after July 1, 2007 - with the effective date of transfer not being earlier than January 1, 2008.

On September 10, 2007, WNS entered into another agreement with Aviva to amend the existing terms of exercise of option. Pursuant to this amendment, the earliest date of exercise of the option was extended to January 1, 2008, with the effective date of transfer not being earlier than April 2, 2008.

Earlier, Aviva completed the transfer of its 1,600-seater Chennai BPO from 24/7 Customer on January 1, 2007. It also took over the WNS-operated 300-seat facility in Sri Lanka in July 2007.