Ramco Industries to hive off software unit

Under the deal, shareholders of Ramco Industries would get one Ramco Systems share for every share held by them, the note said.

Ramco Industries will also transfer overseas investments, including assets in Ramco Systems corporation of US, Ramco Systems Ltd of Switzerland, Ramco Systems of Malaysia and Ramco Systems of Singapore for a consideration in the form of equity shares.

However, the price of these shares would be decided at a later date after mutual considerations. Established in 1989, Ramco Systems developed and marketed high-enterprise application solutions and was one of the fewglobal enterprise resource planning ERP vendors to emerge in the 1990s with new technology platforms.

Both companies would be filing the de-merger scheme with the Madras High Court shortly and the meeting of shareholders for approval would be called once the court gives a nod, top company sources said.

Ramco Systems would also apply to the stock exchange for automatic listing after receiving final approval of the court, the sources said adding that the de-merger was done as per the provisions of the Income Tax Act, 1999. This long-awaited move would give Ramco Systems more leverage in the highly competitive enterprise application product markets of the world, they said.

Recognising the future trend of software development as well as enterprise application, Ramco had already invested more than 150 man-years on a new highly productive and flexible technology framework for web-based business software development.

Further versions of Ramco applications would be on this new software framework, whichwould substantially reduce the life cycle cost of software from development to customer usage besides enhancing the life of the software. Ramco might also plan to encourage software developers and system integrators to use this software development framework in solving specific customer problems, the sources said.