Hermes Pac. Regulatory News (HPAC)

9 Feb 2006 07:01

India Outsourcing Services PLC09 February 2006 For immediate release 9 February 2006 INDIA OUTSOURCING SERVICES PLC ('India Outsourcing' or 'the Company') Placing to raise £3.0 million Consolidation of Shares, Grant of Options and Admission to AIM Notice of Extraordinary General Meeting India Outsourcing Services plc (AIM: IOS), a company formed to capitalise onacquisition and investment opportunities primarily within the Indian businessprocess outsourcing ("BPO") industry, is pleased to announce that it has,through Daniel Stewart, conditionally placed 6,666,667 new ordinary shares (the"Placing Shares") raising a total of £3.0 million before expenses ("the Placing"). The Placing Shares are being placed at 45p a share, on the basis of theproposed consolidation of every 10 ordinary shares of 1p each into 1 ordinaryshare of 10p. Application has been made to AIM for the Placing Shares and forthe Ordinary Shares of the Company to be admitted to trading, which is expectedto commence on 7 March 2006. Highlights The Placing to raise a total of £3 million before expenses will allow theCompany to pursue its strategy of identifying, evaluating and, ultimately,completing acquisitions in the business process outsourcing industry primarilywithin India. India Outsourcing intends to acquire a small number of companies thatdemonstrate qualities including strong growth prospects, recurring revenuestreams, scalable delivery platforms and established client relationships. The Indian BPO market is estimated to have grown by about 40 per cent during2004/5 to reach $5 billion and is forecast to reach $21 billion by 2008 (source:NASSCOM - McKinsey). The global BPO market is forecast to reach $230 billion in2008 (source: Deloitte Consulting, India). Since its flotation on AIM in December 2004, India Outsourcing has madesignificant progress in identifying suitable acquisitions and the Directorsbelieve the Placing will increase the credibility of the Company with vendors ofpotential targets, will broaden the Company's institutional shareholder base andprovide increased working capital. The Company has identified support services to the healthcare sector and thedocument management sector of the Indian BPO industry as being of particularinterest. It is proposed to consolidate the ordinary shares of the Company so that every10 ordinary shares of 1p each will become 1 ordinary share of 10p each. Theshare consolidation will be included in resolutions to be put before anExtraordinary General Meeting ("EGM") of the Company to be convened on 6 March2006. It is proposed that Amit Pau will be granted options over Ordinary Shares of 10pequivalent to 10 per cent of the enlarged issued share capital, at an exerciseprice of 45p per share amounting to a total of 847,916 Ordinary Shares of 10p,which will vest over a period of three years. The Company is seeking readmission of its Ordinary Shares to AIM followingapproval of the resolutions of the EGM. Amit Pau, Chief Executive of India Outsourcing Services, commented: "We havebeen delighted by the support we have received from new institutional andexisting investors who are excited by the potential of the BPO industry inIndia. We now look forward to building on the progress that we have made so farin identifying a suitable acquisition target and in delivering value to all ourshareholders through the successful execution of our strategy." For further information: India Outsourcing Services plc Tel: 020 7297 0012Haresh Kanabar, ChairmanAmit Pau, Chief Executive Daniel Stewart & Company plc Tel: 020 7776 6550Lindsay MairNicholas Marren Buchanan Communications Tel: 020 7466 5000Mark Court/Elly Williamson Details of the EGM The EGM of the Company will be held at the offices of Daniel Stewart & Companyplc, Becket House, 36 Old Jewry, London EC2R 8DD at 10am on 6 March 2006 atwhich resolutions will be proposed to approve the continuation of the Companyfor a further 12 months and of its stated strategy, admission to AIM of theOrdinary Shares, consolidation of the Company's share capital, increase theauthorised share capital of the Company, authorise the Directors to allot up to9,380,000 ordinary shares and to dis-apply pre-emption rights over up to1,865,417 ordinary shares (in addition to the Placing Shares and the Grant ofOptions). The Grant of Options is a related party transaction for the purpose of the AIMrules and accordingly Haresh Kanabar and Nigel Robertson, "the IndependentDirectors", consider that having consulted with its nominated adviser the termsof the Grant of Options is fair and reasonable insofar as you are concerned. Inadvising the Independent Directors, Daniel Stewart has relied on theircommercial assessments. Amit Pau (Chief Executive) and Blue Star Capital Plc (which is associated withNigel Robertson, a Director) has subscribed for an aggregate of £350,000 in thePlacing, which constitutes a related party transaction for the purpose of theAIM rules and accordingly, Haresh Kanabar, "the Independent Director", considersthat having consulted with its nominated adviser the Placing is fair andreasonable insofar as Shareholders are concerned. In advising the IndependentDirector, Daniel Stewart has relied on his commercial assessments. Accordingly the Independent Director recommends that you vote in favour of theResolutions to be proposed at the EGM. Daniel Stewart & Company plc acts as nominated adviser and broker to theCompany. This information is provided by RNS The company news service from the London Stock Exchange