Essar concludes Aegis sale for Rs 2,000 crore, says it's able to cut debt

Mumbai: The embattled Essar Group on Monday 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. Earlier, it had concluded a USD 13 billion deal to sell its oil business to Russia's syRosneft.

A July media report had pegged the total debt of the group at Rs 1.38 trillion. Some reports had said the Rosneft deal alone would have helped it pare debt by Rs 70,000 crore.

However, it was not immediately clear about the levels to which the debt of the group has come down to.

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.

"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.