Tuesday, January 21, 2014

Alert : Palred Technologies Limited (Formerly Foursoft Ltd)

Further To my Post on Special Situation in Four-soft (Here),There are several Corporate development in the company (Here).

a) The Company is merging "Pal Premium Online Media Pvt. Ltd", (Here) A web development company with itself. It is worth noting that CMD of the company is also a stake holder in Pal Premium Online Media Pvt. Ltd, It can be termed as a related party transaction. Palred is yet to appoint the merchant bankers for the merger, but the terms of merger is also not known.

b) The Company is also by an Internet Marketing Portal "Deals15.com" from  "Premium Web Services Private Limited". Here also the terms of acquisition is not known.

Because of the above development, I await clarity on company's intention of return of capital to shareholders of Rs 29/-(Here). There can be increase in capital because of merger. Also the outflow on purchase of Deal15.com is not know.

Based on these development, my idea of earning a decent return in Four-soft may not hold true. I guess we should avoid it as of now.

There is also a probability that company returns the capital as planned, before the merger (Merger if it happens will take some time.) and the investor may still get the return.

But I will avoid the uncertainties.

This is not a recommendation to anybody whatsoever to buy OR sell this share, but it is my thought process and views on this topic.

I welcome your critical comments and suggestions.

PS : I had taken position in stock.

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