Mid-cap information technology (IT) services company 3i Infotech, formerly promoted by ICICI Bank, is in talks to divest a majority stake in Locuz Enterprise, a firm it acquired in 2008. This is being done as part of its corporate debt restructuring (CDR) plan to improve liquidity position.
The company intends to divest 74 per cent in Locuz Enterprise and raise Rs 60 crore. Hyderabad-based Locuz Enterprise is a provider of IT infrastructure solutions and services and has presence in high-performance computing, tiered storage, information security and IP convergence solutions.
3i Infotech had acquired 23 per cent stake in the company in 2008 for Rs 6.9 crore as it was widening its presence in the IT infrastructure solutions space. It eventually increased the stake to 74 per cent, by investing an additional Rs 15.87 crore.
An email sent to the company did not elicit any response. The CEO & MD V Srinivasan and other senior management officials could not be contacted, despite repeated attempts.
This will not be the first time the company will be selling of one of its acquired assets. Last year, 3i Infotech sold its US-based billing and payments unit, consisting of Regulus Group and J&B Software, to an affiliate of private equity firm Cerberus Capital Management, LP, for $137 million (then Rs 614 crore). The company had then stated that the divestment would help it to reduce the leverage and strengthen its balance sheet.
3i Infotech's cut-off date for restructuring was October 1, 2011. The leading lending banks to the company include ICICI Bank, IDBI and Standard Chartered.
The company had announced in March that its CDR plan had been approved. "The group has cleared a plan to convert 15 per cent of its total secured debt and 20 per cent of unsecured debt into equity, or compulsorily convertible preference shares. It will also get a two-year moratorium, from last October 1, on the repayment of the rest of the loans, and another 10 years to clear the debt," 3i Infotech said in a filing to the stock exchanges.
The company had also managed to raise additional term loans of up to Rs 75 crore.
According to the company's filing for the quarter ended September 30, 2011, it had loans and advances worth Rs 1,966 crore. The company has managed to get RBI approval for replacing its current FCCBs with fresh bonds.
