Citi, Goldman acquire stake in ICSA India

Hyderabad-based ICSA (India) is divesting 14 per cent of its stake to Citigroup Venture Capital International Growth Partnership Mauritius (CVC) for $30 million (about Rs 135 crore). CVC will also make its presence felt in the company's board.

Simultaneously, Goldman Sachs, a leading global investment banking firm, is investing $22 million (about Rs 97 crore) through foreign currency convertible bonds (FCCBs) in ICSA, an embedded technology and electrical infrastructure solutions provider for the power, oil and gas sectors.

As per the understanding, the FCCBs would be converted over five years at a premium of 40 per cent as per the market rate prevailing at the time of conversion. CVC will be purchasing ICSA's stake at Rs 950 per share. The company's stock on the BSE on Wednesday closed at Rs 1,099.25, a decline of Rs 16.10, compared with the previous day's close of 1,115.35.

The investments from the two global players has been approved by the ICSA board, which met here today. The company's board had also decided to increase the authorised equity share capital from the existing Rs 10 crore to Rs 15 crore. It will be holding an extraordinary general meeting on February 12 to seek shareholders' approval in this regard.

ICSA Chairman and Managing Director G Bala Reddy said the $52 million (Rs 230 crore) investments from CVC and Goldman Sachs would be utilised for meeting ICSA's growing working capital requirements, inorganic expansion, research and development and the creation of necessary infrastructure.

Reddy said ICSA was looking forward to working with technical organisations that have global presence so as to expand its activities abroad. It is also tying up with major information technology firms like Tata Consultancy Services for this purpose.

ICSA has its operations in Malaysia, Singapore, West Asia, Sudan and Nigeria. "Now, we will have our presence in the US through an associate," Reddy said, adding that the company intended to "go global fast". Domestic operations account for 75 per cent of the company's revenues.

"We are looking at a significant increase in shareholders' value," Citigroup Investments India Managing Director Ajay Relan said. He added that ICSA products have high margins in the market place.