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Online Media eyes Rs 60-cr Mauritius cable project

C.R. Sukumar

HYDERABAD, May 5

ONLINE Media Solutions Ltd (OMSL), the Hyderabad-based multimedia, networking and software solutions company, is all set to implement a major communication cable networking project in the Republic of Mauritius.

The networking project, appraised by both Arthur Andersen and the Andhra Pradesh Industrial and Technical Consultancy Organisation (APITCO) - promoted by IDBI, ICICI, IFCI, APIDC and APSFC - is estimated to involve a capital outlay of around Rs 60 crore.

``The work on the initial phase of the project is scheduled to begin during the first week of June. The first phase will be completed and operational by the year-end'', the OMSL Executive Director, Mr P.V. Narasimha Rao, told Business Line.

The appraisal report has placed the cost of initial phase at Rs 8.58 crore. As per the appraisal, the project is expected to generate a revenue of Rs 36 crore during the first year of operations, Rs 45 crore in the second year and Rs 54 crore in the thir d year.

Mr Narasimha Rao conceived the idea of implementing the communication networking project at Mauritius. Mr Rao and his associates - Mr P. Harinath Babu, Ms P. Sujana, Mr S.Y. Sree Kumar, all directors of OMSL - are currently holding the in-principle appro val from the Republic of Mauritius for implementing the networking project.

Mr Rao, who was inducted on to the OMSL board recently, expressed his interest to transfer the project to the company. Mr Rao and associates agreed in principle to transfer their 70-per cent holding in the Mauritius joint venture project to OMSL for a co nsideration of Rs 2 crore and re-imbursement of preliminary expenses incurred by them to the tune of Rs 14.75 lakh.

The OMSL board now proposes to pay this consideration by way of allotment of 21.47 lakh OMSL equity shares of Rs 10 each for consideration other than cash at par aggregating to Rs 2.14 crore on a preferential allotment basis.

According to the OMSL Managing Director, Mr K. Srinivas Rao, ``in the light of the expected revenues to the company, this consideration has been found justified by the board.''

The promoters are currently holding 44.35 per cent of OMSL's paid-up equity of Rs 10.53 crore, while the balance 55.65 per cent is held by the public. Subsequent to the preferential offer to Mr P.V. Narasimha Rao and associates, the holding of promoters would go up to 53.59 per cent on the expanded equity base of Rs 12.68 crore. Accordingly, the public holding in the company would get reduced to 46.41 per cent.

The OMSL board has decided to convene an extraordinary general meeting shortly to obtain the consent of its shareholders for the proposed preferential offer to Mr P.V. Narasimha Rao and associates.