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Essar sells Aegis for Rs 2000 crore; pares Rs 75,000 crore debt

Debt-ridden Essar Group on Friday announced the closure of its BPO arm Aegis sale for Rs 2,000 crore and said it has been able to pare debt by Rs 75,000 crore, thanks to the proceeds from the recent sale of its refinery business.

BT Online        Last Updated: November 27, 2017  | 18:12 IST
Essar sells Aegis for Rs 2000 crore; pares Rs 75,000 crore debt
Photo: Reuters

Debt-ridden Essar Group on Friday announced the closure of its BPO arm Aegis sale for Rs 2,000 crore and said it has been able to pare debt by Rs 75,000 crore, thanks to the proceeds from the recent sale of its refinery business.

The company announced the conclusion of the Rs 2,000-crore sale of Aegis to Capital Square Partners (CSP), marking its exit from the business process outsourcing (BPO) business.

In July this year, the total debt of the group was Rs 1.38 lakh crore. A Businees Today report had earlier said that Rosneft deal alone would bring down Essar's debt to around Rs 70,000 crore.

In 2014, Essar sold its BPO business in the US, Aegis USA Inc, to Frances Teleperformance for $610 million. Early this year, Essar exited the BPO business by selling assets in 10 countries to Singapore-based private equity firm Capital Square Partners for $300 million (Rs 1,950 crore). Essar had acquired US-based Aegis Communications in November 2003.

The diversified conglomerate has been selling off assets to pare its high debt, which has seen it exiting the oil business and also sell realty holdings, apart from Aegis, the BPO arm. Earlier, it had concluded a $13 billion deal to sell its oil business to Russia's Rosneft.

"Net proceeds from this sale (of Aegis)...will be used to retire our debt at the group level," Essar said in statement.

"The closure of this transaction is in line with Essar's intent to reduce leverage that is complemented by an asset monetisation programme. The proceeds from the sale of Aegis and Essar Oil have enabled Essar to retire almost Rs 75,000 crore of debt," it added.

The Aegis sale was announced on this April 3 and involved AGC Holdings Mauritius, a wholly-owned portfolio company of Essar Global, selling 100 per cent stake in ESM Holdings Mauritius, the holding company of Aegis, to CSP, a Singapore-based private equity fund.

The statement said Essar had acquired Aegis Communication in 2003 and it has now grown over tenfold to become a significant player in the outsourcing industry.

Aegis is present in nine countries, including India, South Africa, Australia, Saudi Arabia, England, Argentina, Sri Lanka, Peru and Malaysia. Under Essar, it carried out 19 acquisitions and all of them were successful, the statement said.

"The closure of this transaction is yet another validation of Essar Global Fund's commitment to reduce its leverage by monetising the non-core businesses," Uday Gujadhur, director of AGC Holding, said in the statement.

"We are keenly looking forward to working with the Aegis management team to grow its global footprint and enhance its capabilities and excellence in service to its customers," CSP managing partners Sanjay Chakrabarty and Mukesh Sharda said in a joint statement.

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