Refinancing comes as the company is in discussions with financial investors for an equity sale
Aegis, the BPO arm of Essar Group, has managed to raise $156 million (around Rs 780 crore) to refinance its bridge loan.
By doing so, the company has reduced its debt by $34 million, which would further strengthen the balance sheet in the run up to their discussion with financial and strategic investors for equity sale, said the company.
"Aegis has refinanced its bridge loan of $190 million by a mix of new five-year debt of $156 million and the balance out of cash available on the balance sheet. As a result of this deal, not only Aegis' overall debt stands reduced by $34 million, the company would also get the benefit of reduced interest payout,”� said a company spokesperson.
Comerica Bank, Deutsche Bank, ING, Macquarie, Societe Generale and UBS have participated in this deal.
The original book size that was coming up for refinancing was about $200 million, but the company has refinanced only to the tune of $156 million. “The gap is deliberate. This is because we were having surplus cash on our balance sheet. Hence, through this deal, we have reduced debt on our books by about $34 million,” said the spokesperson.
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However, the company did not divulge the interest rate that the new debt would incur. “Can't comment on interest rate, but we have managed to close the deal at very competitive rates, in spite of current tough market conditions,” said the spokesperson.
In a recent note, Standard & Poor’s, the rating firm, had kept the company on a credit watch with negative implications. The credit rating agency had stated it might look at revising the outlook, if the company is able to refinance its debt and improve its margins.
Aegis, which is expected to clock revenue of $1 billion for fiscal year 2012, has spent close to $350 million for acquisitions. According to S&P, the company’s Ebitda margins are expected to be 10-11 per cent for FY12.
The company’s senior management has stated in the past they might look for a public listing to raise funds in the range of $300-400 million. In an earlier statement, Aparup Sengupta, managing director and global chief executive officer, Aegis, also agreed the company would prefer to have strategic partners on board before the IPO. He has also said the company would be comfortable to divest 15-20 per cent stake to a strategic partner.
On being asked whether the company is in talks with any private equity players, the spokesperson stated: “The management has held preliminary discussions with several interested parties.” In recent media reports, it was said that PE players Blackstone and Carlyle were in talks with the company.