This would mark Essar’s complete exit from BPO business.
Sale proceeds to be used to reduce Essar’s debt.
Essar has reduced Rs 75,000 crore of group debt through asset monetisation
In what will mark the company’s complete exit from BPO business, Essar on Monday announced selling its BPO business company, Aegis, to Singapore-based private equity fund — Capital Square Partners (CSP) in a deal valued at $300 million (Rs 2,000 crore).
“AGC Holdings Limited (AGC) Mauritius, a wholly owned portfolio company of Essar Global Fund Limited (Essar Global), has concluded the sale of 100 per cent of its stake in ESM Holdings Limited, Mauritius, which is the holding company of Aegis, a major global outsourcing company, to Capital Square Partners (CSP) for $300 million (approximately Rs 2,000 crore),” the company announced.
While the sale was announced on 3 April 2017, it took the company eight months to conclude the deal. The net proceeds from this sale will be used to retire Essar’s group debt. Earlier, the Essar group had, under a $13 billion deal, sold Essar Oil — the firm controlling the group’s oil business, to Russia's Rosneft.
According to Essar, the closure of this transaction is in line with the group’s intent to reduce leverage through asset monetisation. The proceeds from the current sale of Aegis, coupled with the sale of Essar Oil, have enabled Essar to retire almost Rs 75,000 crore of debt, said an official.
"I am very excited to have CSP join us as our new partners in Aegis’ growth journey,” said Sandip Sen, Global CEO, Aegis.
Axis Capital was the financial advisor of Essar in this transaction while Platinum Partners and Sidley Austin served the company as legal advisors. In contrast, Shearman & Sterling and Shardul Amarchand Mangaldas acted as legal advisors to CSP.
"With this acquisition now complete, 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,” Sanjay Chakrabarty and Mukesh Sharda, managing partners of CSP said in a joint statement.
The transaction also marks Essar Global’s complete exit from the BPO business after creating significant value through organic growth and strategic acquisitions that helped diversify customer offerings.
“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 in its portfolio,” said Uday Gujadhur, director - AGC Holding.
It may be noted here that the Essar group had acquired Aegis Communication in 2003. Post its acquistion, Aegis has grown to become a significant player in the outsourcing industry.
Through organic growth and 19 strategic acquisitions, Aegis expanded its global footprint across nine countries, namely India, South Africa, Australia, Saudi Arabia, UK, Argentina, Sri Lanka, Peru and Malaysia.
With a strength of over 40,000 experts, Aegis has been a leading outsourcing business solutions partner to global corporations in the telecom, technology, media, banking, financial services and insurance, travel and logistics, retail, e-commerce and public sectors.
Essar Global Fund operates a number of assets diversified across the core sectors of energy, metals and mining, infrastructure and services. The aggregated revenues of the fund’s portfolio companies total $15 billion. Fund’s portfolio companies employ over 10,000 people.