Subex to Raise Funds to Redeem FCCBs

Leading global provider of Business Support Systems (BSS) for Communications Service Providers (CSPs), Subex Ltd has obtained Board approval to raise upto US $ 135 million. This is subject to the approval of the shareholders at the Extra-ordinary General Meeting of the Members to be held on December 28, 2011.

The Company has two tranches of Foreign Currency Convertible Bonds (FCCBs) with a total redemption value of USD $ 131 million, which it needs to redeem in March 2012 and the current fund raise is to meet that obligation. Subash Menon, Founder Chairman, Managing Director and CEO, Subex Limited said, "We intend to raise the required amount through debt or equity or a combination of the two."

He further added, "We are clearly committed towards our customers and investors and are confident of the future of the business seeing the increasing traction for the company's industry leading ROC® and Managed Services offering."

Subex has been recording strong growth and profitability in its Continuing Product Business (Business Optimization or RMS). In Q2, revenue for this segment grew 26% Y-o-Y. Consequent to the sale of its Activation products, the company has put more emphasize in Business Optimization or RMS. This segment, which is the area in which the company has been operating traditionally, is the fastest growing segment in telecom BSS space.

During the recently concluded FY12 Q2 results, the Product Revenue for the company stood at Rs. 1177.65 mln (USD 25.18 mln) accounting for 91.37 % of the consolidated revenue. The company posted a Product EBITDA of Rs. 381.66 mln (USD 8.16 mln) i.e. 32.41% while the EBITDA for Continuing Product Business (Business Optimization or RMS) was Rs. 451.81 (USD 9.66 mln) i.e. 41.7%.

The stock was trading at Rs.35.70, up by Rs.0.80 or 2.29%. The stock hit an intraday high of Rs.36.40 and low of Rs.35.10.

The total traded quantity was 1.54 lakhs compared to 2 week average of 4.10 lakhs.

Source : Equity Bulls

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