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HCL Infosystems in recast mode

Calcutta, Jan. 15: HCL Infosystems will spin off its hardware, learning and services businesses into separate units to create a leaner structure and improve operational efficiency.

In a notification to the Bombay Stock Exchange, the company said it would transfer its hardware solutions business to a wholly owned subsidiary — HCL System Integration Ltd.

Its learning business will be transferred to another subsidiary called HCL Learning, while the services business will be transferred to HCL Care.

The company’s board has also approved the merger of HCL Infocom, a wholly owned subsidiary, with the parent HCL Infosystems.

“The restructuring of the businesses is with the objective of providing focused management orientation to each of the growth areas and to create a leaner organisation for the hardware solutions business… the appointed date of the aforesaid shall be January 1, 2013,” the statement said.

The hardware solutions subsidiary will include the company’s hardware solutions and systems integration business, while the services subsidiary will focus on lifecycle support services, managed services and office automation services.

The learning subsidiary will include its offerings on DigiSchool, learning content, test preparation and vocational training.

The company has decided to leave the telecom distribution business with the parent, HCL Infosystems.

Digilife Distribution and Marketing Services Ltd, another subsidiary, will continue with the distribution of non-telecom products.

In a press communique issued later in the day, the company said its different businesses were at various stages of business lifecycle maturity.

Some of its new growth businesses are in infancy, requiring investments, while the more mature businesses need re-tooling to be ready for the changing business environment, it said.

According to the company, benefits accruing out of this proposed restructuring include greater visibility on the operational and financial performance of each business and a higher degree of independence and accountability for each segment.

This is also expected to open up opportunities for strategic partnership for growth and address more effectively the different talent and funding needs of these businesses.

A composite scheme of arrangement under the provisions of section 391 and 394 of the Companies Act, 1956 was approved by the board and is subject to requisite consent of shareholders, lenders, creditors and sanction by the Delhi high court.

The HCL Infosystems scrip rose to a high of Rs 42.10 in intra-day trade on the Bombay Stock Exchange before closing at Rs 41, up 4.86 per cent from yesterday's close of Rs 39.10.

The company said it had appointed various consultants to advise on the restructuring. Its board has appointed a committee to take all necessary actions for obtaining requisite approvals, to appoint any other consultants as may be necessary and decide and settle all issues that may arise in this regard.

The company’s standalone net profit had dipped over 84 per cent to Rs 2.54 crore in the July-September 2012 quarter from Rs 16.19 crore in the year ago period.

Net sales in the quarter stood at Rs 2,341.68 crore, down nearly 13 per cent. Computer system and other related products and services vertical accounted for Rs 656.73 crore in revenues.

 
 
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