ebookers secures $10m investment in India business
October 02 2003 - 9:00AM
UK Regulatory
ebookers secures $10m investment in India business,
valuing entire subsidiary at $160m
and gives trading update
2 October 2003 - ebookers plc (Nasdaq - EBKR, LSE - EBR) the No.1 online
pan-European retail leisure specialist, today announces an investment of $10m
in its India BPO subsidiary, Tecnovate, and gives an update on trading.
Tecnovate, a Business Process Outsourcing facility, is currently being expanded
by ebookers plc to service third party clients, with the potential for
significant future revenue streams for the group.
The $10m investment is being made by Kipotechniki BVBA, a Belgian-registered
subsidiary of Mikal Ltd, a holding company with a wide range of commercial
activities. It is both a strategic and financial investment. Mikal will acquire
new shares in Tecnovate representing 6.25% of its enlarged share capital. The
consideration will be payable in two tranches with $5m due immediately and the
remaining $5m by 31 December 2003. Prior to this transaction Tecnovate was a
100% owned subsidiary of ebookers plc.
The $10m consideration will be used to fund the further expansion of Tecnovate
to accommodate its first third party clients. The facility is being expanded
from 22,000 sq ft to 84,000 sq ft and staff capacity increased from 600 to
2,000. Tecnovate is currently in negotiation with several major international
organisations as potential clients.
Tecnovate is a provider of Business Process Outsourcing services based in New
Delhi India, and was established by ebookers plc in July 2001. It provides 13
services in travel, software and financial business services in seven European
languages for travel companies at costs of up to 70% below European levels.
Last quarter (Q2 03) Tecnovate delivered savings to ebookers plc of �1.4m and
cost savings could rise to �2m per quarter by the end of the year as Tecnovate
handles greater volumes of ebookers' business processes.
Trading update August and September
ebookers plc August trading was subdued, due to the unusually hot weather,
causing customers to stay at home. The UK was also affected by migration
difficulties due to the installation of new mid-office technology.
This issue is now resolved and resultant productivity gains are now being seen.
Travelbag's online conversion is continuing to make excellent progress with 46%
internet passenger bookings on the travelbag website in September, compared to
16% in January before it was acquired.
September has seen considerably improved trading throughout the group. The
company is becoming increasingly optimistic about strong consumer demand in the
fourth quarter (October- December 2003).
Dinesh Dhamija, CEO ebookers plc comments:
"This investment of $10m for just 6.25% of Tecnovate's share capital underlines
the potential embedded value of the BPO operation we have developed in India.
This investment would equate to a value for the whole of the BPO operation of
$160m, even at this early stage. This is equivalent to nearly $5 for each
ebookers ADR or nearly �1.50 per ordinary share."
"Tecnovate represents an enormous opportunity for ebookers. It offers a way for
businesses to raise levels of efficiency, and reduce costs for their back
offices."
Prashant Sahni, CEO Tecnovate
"Tecnovate is already proving its worth to ebookers plc. We welcome this
further investment and look forward to completing the expansion of the facility
and also welcoming our first external clients, as soon as possible."
ebookers announces its third quarter financial results on 3 November 2003.
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About ebookers plc
ebookers is a leading pan-European online retail leisure specialist with
websites in 12 European countries - UK, France,
Ireland, Germany, Austria, Spain, Holland, Switzerland, Sweden, Denmark,
Norway, and Finland. It specialises in the mid- and long-haul modular leisure
segments of the European travel industry. It also specialises in selling
discount merchant fares, which are negotiated directly with leading travel
suppliers in order to help them sell their excess capacity without damaging
their pricing structure and brands. ebookers has a low-cost BPO facility in New
Delhi, India - Tecnovate - with a staff of over 600, which carries out 13
separate functions from email sales to software development. The Company has a
multi brand marketing strategy. Its brands include ebookers.com, Flightbookers,
Travelbag, Travelbag Adventures Bridge the World, and MrJet. ebookers plc is
listed on the London Stock Exchange and quoted on Nasdaq in the United States
of America.
About Mikal Ltd
Mikal Ltd is an Israeli Holding company located in Tel-Aviv. Mikal Ltd has
several activities including commercial activities such as power centres,
venture-capital investments in High-Tech companies and industrial companies
such as Soltam Systems and International Technologies Lasers (ITL). Mikal Ltd
owns 99.9% of the share capital of Kipotechniki BVBA.
Forward Looking Statements
Except for the historical information contained herein, the matters discussed
in this news release are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
in such forward looking statements. Potential risks and uncertainties include,
without limitation, the company's ability to identify, acquire and integrated
companies across Europe including Travelbag Holdings, its ability to
significantly increase its online revenues and sales volumes, to maintain and
develop relationships with travel suppliers and strategic partners and to
attract and retain customers, potential adverse changes in its gross mark up or
in commission rates, reduce its operating costs through outsourcing certain
functions to India, unforeseen events affecting the travel industry, and the
company's dependence on its ability to establish its brand. The foregoing list
of important factors is not exhaustive. When relying on forward-looking
statements, readers should carefully consider the foregoing factors and other
uncertainties and events, as well as factors described in documents ebookers
plc files from time to time with regulatory authorities in the United Kingdom
and the United States, including annual reports on Form 20-F filed with the US
Securities and Exchange Commission. Any forward-looking statements speak only
as of the date on which they are made and except as required by the rules of
the UK Listing Authority, the London Stock Exchange and applicable law,
ebookers plc undertakes no obligation to update publicly or revise any
forward-looking statements.
For further information:
ebookers plc +44 (0) 20 7489 2239
Oliver Strong +44 (0) 7771 934 153
oliver.strong@ebookers.com
Cubitt Consulting (UK) +44 (0) 20 7367 5130
Fergus Wylie/Peter Ogden
peter.ogden@cubitt.com
Indian media: +91 98014 01967
Prashant Sahni, CEO Tecnovate
prashant.sahni@ebookers.com
Alok Chopra +91 98103 97925
alok.chopra@ebookers.com
LinOpinion Public Relations +91 11 2331 1096
Sheena Sharma
sheena.sharma@lowemail.com
LinOpinion Public Relations +91 11 2331 1096
Sheena Sharma
sheena.sharma@lowemail.com
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