AGS Transact Technologies said it has accepted a non-binding term sheet for the sale of its 90 per cent equity stake in its step-down international subsidiary, Novus Technologies Pte. Ltd. The deal is subject to completion of definitive agreements, due diligence, and customary closing conditions.
“The transaction is in line with the company’s efforts to reduce debt and improve cash flow. The signing of the term sheet marks a significant milestone in the transaction process, with both parties targeting completion in H1 of 2025,” it said, without disclosing the name of buyer entity.
Fight for survival
This is the first major stake sale announced by AGS Transact after defaulting on debt obligations earlier this year. businessline had reported earlier this month that AGS Transact Technologies is in talks to sell a majority stake in its digital payment subsidiary India Transact Services (ITSL) to Patanjali group, citing sources. AGS is also looking to sell its ‘ATM Switch’ business vertical to India 1 Payments, the report said. India 1 is a white label ATM operator, promoted by BANKTECH Group PTY Ltd and BTI Payments Singapore PTE Ltd. The talks between the two parties, however, are yet to reach an advanced stage.
In February, Crisil Ratings downgraded AGS Transact’s ₹900 crore bank loan facility to ‘D’ or junk, as it did delayed paying its loan obligations.
Per interactions with the AGS management, Crisil Ratings said it believes that the liquidity of the company has sharply deteriorated over the past 2-3 months owing to delay in collection from receivables as AGS was not able to meet the service level agreements (SLAs) with its customers. Despite repeated follow-up with AGS to obtain more details, Crisil said it was is yet to receive any details on the deficiencies of AGS in meeting its SLAs. Banks, who used ATM services of AGS, too moved their business contracts to other players like Hitachi and CMS.