Web domain and hosting service provider Net 4 India got an approval from its board of directors, for re-organizing its business: Pipetel Communications, a wholly-owned subsidiary of the company, which offers Enterprise Internet Services, VoIP Solutions and Web Services billing and provisioning platforms, will be merged with the company, and the ISP business of the company will be demerged into Net 4 Network Services. Net 4 India had acquired a majority stake in Pipetel Communications for Rs 4.16 crore, earlier this year.
According to the company, the merger will facilitate the direct ownership of the Web Services billing and provisioning platform, and the demerger of the ISP Undertaking will better position each business to seek strategic partnerships and investors at an entity level.
Following the merger, the investments held by the Net4, representing 100% equity shares in Pipetel would stand cancelled against equity share capital of Pipetel, and shareholders holding compulsory convertible preference shares of Pipetel will be allotted 9,59,187 equity shares at Rs. 10 each, of the Company.
Net 4 had reported an increase of about 84% in its net profit and a 53% growth in revenues for the quarter ended March 31st 2011. It is also in the process of setting up a new data center in Chennai, which will be complete by the last quarter of this financial year.