As per the agreement signed yesterday, TAIB Bank, IndAsia Ventures and Darius Pandole will buy out Sonawala's 65 per cent stake in the company or 78 lakh shares at Rs 8 per share amounting to Rs 6.24 crore, subject to approvals from the foreign investment promotion board.

Of the 78 lakh shares, it is understood that TAIB Bank will pick up a majority of 74 lakh shares or 61.66 per cent with IndAsia and Darius Pandole picking up the remaining 4 lakh shares.

On getting the necessary approvals, the acquirers, in line with Sebi guidelines, will make an open ofer for 20 per cent of the company or for 24 lakh shares. DSP Merril Lynch, which was the advisor to the negotiated deal, will manage the open offer, the modalities of whichare being worked out.

In addition, the investors along with Sonawala will subscribe to 80 lakh equity shares at par on a preferential basis. While Sonawala will subscribe to 8 lakh shares, the remaining 72 lakh shares will be subscribed to by the new investors.

This is being done in a bid to inject fresh capital into the company, which has been stung by losses leading to an erosion in its capital base. It is understood that as of March 31, 1998, the company had accumulated losses of Rs 11 crore on revenues of Rs 7 crore.

Besdies, a new management team will be put in place in HIL which would be headed by Philippe Silberzahn, who was earlier with global consultancy firm, Andersen Consulting. However, Sonawala, will continue to remain as the chairman of the company, although on a non-executive basis.

Once the deal goes through, it is understood that the company will reduce its equity from the present Rs 12 crore to Rs 3 crore. Also, after the fresh equity of Rs 8 crore is injected into the company, theequity will stand at Rs 5 crore. HIL, which was incorporated in 1991, has been facing rough weather for the past few years. The company had started a restructuring exercise as per which it was downsizing its loss making non-software operations like medical equipments and computer graphics. With the new management in place, the company is expected to focus mainly on software exports, especially embedded software applications. This will be the third software related acquisition by TAIB Bank in India. The investment bank already has controlling stakes in Nicco and Silverline.