Essar Group is looking to dilute stake in its Business Process Outsourcing arm Aegis Ltd, followed by an initial public offering.

But the proceeds would not be ploughed back into the company.

The Ruia family would look at redeploying the proceeds in Essar’s core projects such as shipping, mining and oil, among others.

“The monetisation plans for Aegis is that we will initially dilute a small percentage to an investor — which could be a private equity (PE) fund or a strategic (investor) — and then take the company public,” Aegis Managing Director and Global CEO, Aparup Sengupta, told Business Line.

“… post that there will be no 51 per cent shareholder, it will be an ‘institutional ownership’ company. If going below 51 per cent (holding of the group), is construed and considered as exiting, then it’s true,” he said.

The group, which has already appointed Standard Chartered as the merchant banker, has also initiated discussions with a number of firms, Sengupta added, but declined to name the PE funds or strategic investors involved in the talks.

Open to options

When asked about the percentage of stake the group was willing to dilute, Sengupta said, “in this whole idea of recapitalisation, we are open to options…” and added that Essar would continue to hold a stake in the company.

Aegis Technology expects the deal to be closed in this calendar year, and would take a final call on the IPO — whether it would be in India or abroad — only after the stake sale.

However, the proceeds from neither the stake sale nor the IPO would be ploughed back into the BPO firm as this would be harvesting of the investments.

“It’s the call the family will take… Aegis doesn’t need capital for organic growth,” Sengupta added.

(This article was published on August 8, 2012)
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