Multiple Zones to buy back Mail.com stake
( By Saikat Chatterjee, Business Times Bureau, New Delhi)

Reflecting the churn in the dotcom business, IT product vendor Multiple Zones India (MZI), which was acquired by US-based messaging service provider Mail.com late last year, is back on its path to become an independent entity again.

The current management of MZI along with its employees have decided to buy back the equity held by Mail.com. MZI has recently signed a letter of intent with Mail.com to this effect.

"As part of the deal we're forsaking all options we held in Mail.com and also paying a cash consideration to it," Manpreet Singh, MD of MZI told The Times of India To bring in funds, MZI is in talks with four investors who have expressed interest to take a stake in the company.

"Out of these, two-three investors will be offered a total of 20 per cent in MZI," Singh said. The rest of the equity will be held by the management and employees of MZI.

Mail.com had earlier acquired MZI for $9 million including a $3 million cash infusion into the company. Prior to Mail.com's acquisition of MZI, Multiple Zones Inc, US and Gokul Tandon held 40 per cent each in the company, while the rest 20 was held by Manpreet Singh.

MZI is planning to apply for government approval for the buyback of its shares. The move follows Mail.com's decision to focus on core business--messaging-- and to move out from all other businesses like e-commerce and portals.

Mail.com, as part of an aggressive India foray had bought three India companies--India.com, India Resources Pvt Ltd (IRPL) and Multiple Zones India Ltd (MZIL).

MZI which had done revenues of Rs 53 crore in FY 01 has targeted Rs 100 crore from its operations in FY 02.

It has also restructured its business into four broad categories-- IT products, IT services, office supplies and its lone product--Shastra (an e-commerce engine).

In the first quarter of the FY 02 the company has done Rs 22 crore worth of business.

However, the fate of India.com, Mail.com's India-specific portal business which was also put on the block is yet unclear. After laying off a majority of its employees, the portal is currently being run by skeleton staff.

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