/Samara Capital in talks to acquire 3i Infotech

Samara Capital in talks to acquire 3i Infotech

BENGALURU/MUMBAI: Private equity firm Samara Capital is in talks to acquire troubled mid-market IT services firm 3i Infotech in a transaction pegged at an enterprise value of $ 140-150 million, according to two sources familiar with the development.

The deal has been triggered by lenders of 3i Infotech, which has been undergoing a debt restructuring scheme since 2016, after it defaulted on foreign currency convertible bonds (FCCBs).

“Samara is in discussions with them but a deal has not been finalised as it is a complex transaction,” said one of the sources mentioned above.

Edelweiss is said to be working with lenders of 3i Infotech on the process. TOI could not immediately ascertain if there are other bidders in the fray.

When TOI reached out to 3i for an official response, the company said, “The lenders have not indicated their desire to sell any stake in the company. Further, we do not comment on market speculation.” Samara’s MD Sumeet Narang declined to comment when contacted by TOI.

Samara Capital has been actively buying out companies like the Aditya Birla group-owned retail chain More and logistics services provider Spoton.

3i Infotech’s share price slid 40% in the last one year to Rs 3.5 apiece at Thursday’s close on the NSE from its 52-week high of Rs 5.9, giving the company a market capitalisation of about Rs 570 crore. The company was set up in 1993 as the back office of ICICI.

The company undertook a debt-restructuring scheme (DRS) presented to its lenders in the 2015-16 financial year after it defaulted on FCCBs. In the last fiscal, the company has made pre-payment of Rs 98 crore to its lenders out of total debt of Rs 469 crore. With this pre-payment, the company has now prepaid 15 months of principal debt to its lenders that represents 20.8% of its outstanding debt to lenders, 3i Infotech said in its annual report.

3i Infotech, which counts SBI Mutual Fund and Bayer Crop Science as customers, has over 5,000 employees and over 1,200 customers.

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