Northgate plans Rs 450 cr GDR for global expansion

Hyderabad, Aug 1 (UNI) Northgate Technologies Ltd, an Internet Aggregation Technologies provider plans to raise Rs 450 crore through Global Depository Receipts (GDR) to fund its expansion and launch new online modes globally.

Speaking after the company's AGM meeting here today Northgate Chairman and Managing Director Venkat S Meenavalli said the GDR would be completed within the next 60 to 90 days.

The company, which had the largest online advertisers globally, planned to utilise 60 per cent of the GDR as Capex to fund the ''500-server farm'' it was creating at Hong Kong to cater to the online advertisers' demand in China. Its London 'server farm' with 325 servers had been utilised to serve its 14,000 advertisers in USA, UK and Europe.

The AGM had earlier approved issueing of bonus shares at 1:1 ratio as the company posted Rs 118 crore business in the first quarter during 2007-2008 financial year. It had also declared 40 per cent equity dividend.

With its current equity at Rs 16 crore, the AGM had authorised for increasing the share capital to Rs 50 crore.

The company also planned to increase the FIIs investment to 74 per cent from the current 32 per cent of its paid up capital.

Northgate, whose revenue model was driven by online advertising and IT-ITeS, leverage the proprietary tracking software solutions of Axill Incorporated, one of its four wholly-owned subsidiaries, and had been competing with global internet companies including Google, Yahoo and Skype.

Axill contributed 85 per cent of Northgate's revenue and 35 per cent of its gross profit of Rs 18.77 crore in the quarter ended June 30 this year.

Its foray into gaming segment along with 'Egglad', a first of its kind gaming commerce site, would initially be launched in China and later in India. Its beta version on the internet had drawn sizeable hits. The company in the coming months also expected to secure patent for the Voice Over Internet Protocol (VOIP) developed by Globe7, another subsidiary, which currently had more than four million users.

UNI