Information technology company Persistent Systems is planning to raise more than ₹6,000 crore through non-convertible debentures (NCDs) of various tenures as it finalises financing for its acquisition of Germany's Nagarro SE. According to reports from The Economic Times, the debt could be raised as early as next week as the IT company aims to complete its acquisition announced in June. This represents the second part of fundraising after the company raised ₹4,264 crore through a QIP (qualified institutional placement) of shares earlier this week.
The NCDs will be of various tenures matching the cash flows of the company, starting from one year going up to five years with an average maturity of about three years. As reported by The Economic Times, the money raised through NCDs will replace the short-term, 18-month bridge financing commitment the company had secured from Barclays. The NCDs are likely to be priced between 8.75% and 9.50% and underwritten by HSBC and Barclays. A small part of the deal will include a one-year lot of commercial paper with the rest being NCDs, with longer tenure proceeds earmarked for general corporate purposes.
In June, Persistent launched a voluntary public takeover offer to acquire all outstanding shares of Nagarro SE through its subsidiary Galaxy Germany in what is one of the biggest overseas acquisitions by an Indian IT services company. According to The Economic Times, earlier this month, Persistent announced that the company had secured 94% of Nagarro shares after receiving shareholders offers representing approximately 71.94% to add to the approximately 22.10% stake already secured by Persistent earlier. The total acquisition value comes to around $1.25 billion.
As reported by The Economic Times, the total value that Persistent has to pay comes to around $1.25 billion, out of which $450 million has been raised via a QIP. The rest of the money will be raised by debt as the company does not want to keep a short-term bridge loan on its books which will have to be refinanced ultimately. The company successfully completed a QIP earlier this week, raising ₹4,264 crore before moving to the NCD fundraising phase.
