Pentafour Software & Exports (PSEL) will receive $205 m (Rs 8.2 bn) from Pentafour Communications (PCL) for the sale of its software business division. PCL will pay 30% of the proceeds in cash, the balance 70% in shares.
PSEL will deploy the funds acquired from PCL in expanding its core focus area of multimedia and internet broadcasting. It will be used for producing animation films, home video, content creation, pay cable market etc.
In the media based software segment PSEL specialises in 2D/3D animation and special effects for the film and broadcast industry. The company has executed various 2D/3D animation projects for large US companies like Funimation Productions (for Cyboar), Improvision Corp (Sinbad) and Rich Animation (King and I).
The software division accounted for 45% of PSELís FY99 turnover and was expected to achieve a turnover in the range of Rs 3 bn in the current year.
The hive off has changed PSEL image to that of a media company. It has also impacted the market capitalisation of the company, positively. While no one really had any doubts about the operations of the animation and multimedia operations there were doubts about the software operations.
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