Mid-cap information technology services and products company 3i Infotech is in talks to sell its US subsidiary, Regulus. The deal size was expected to be Rs 450-500 crore, said sources close to the development.
3i Infotech Managing Director and Chief Executive Officer V Srinivasan, and Deputy Managing Director & Chief Financial Officer Amar Chintopanth did not answer calls.
In 2008, the company had acquired Regulus for around $100 million for getting access to the payment processing industry in the US. 3i Infotech had said it would pay $80 million, with an additional consideration of up to $20 million, based on an earn-out linked to certain performance parameters.
Sources said the company may want to exit, as the US payment industry was under pressure. Regulus is one of the largest players in independent bill presentment and remittance processing. The company processes one in every fifty check payments and produces an estimated one of every 25 consumer statements generated in the US, according to the company’s statement.
“The other reason could be that the company wants to reduce its debt on books due to the funds it raised through foreign currency convertible bonds (FCCBs),” said another source tracking the company. 3i Infotech’s total outstanding FCCB redemption amount is over Rs 700 crore. One of the FCCB issues matures this month. The size of the FCCB issue is $50 million. Of this, $20 million is the outstanding issue size. The effective conversion price of the issue is Rs 159.8, whereas the current market price is Rs 41.85.
