Bloomberg News

Zenith Infotech Defaults on $33 Million of Dollar Convertibles

October 13, 2011

Oct. 14 (Bloomberg) -- Zenith Infotech Ltd., an Indian company that maintains computer systems for clients, said it defaulted on $33 million of convertible dollar bonds that matured last month.

“The company has defaulted on its $33 million foreign- currency convertible bonds, which were due on Sept. 21,” Zenith said in a statement to stock exchanges yesterday. It continues to be in negotiations with bondholders to extend the period for repayment, the statement said

Akash Saraf, Zenith’s managing director, didn’t answer at least 10 calls made to his mobile phone in the past two days, or respond to questions faxed to his office yesterday.

Zenith slumped for the seventh day, its longest losing streak in 11 months. The stock slid 10 percent to 90.90 rupees at close in Mumbai yesterday, its lowest level since Dec. 26, 2005. The shares have lost 52 percent this year, compared with an 18 percent decline in the benchmark Sensitive Index.

The company’s par value debt was due for redemption at $131.72 per note, according to data compiled by Bloomberg.

Zenith’s owners and management have not bought or sold any of the company’s shares in the last one year, the statement said.

Zenith spun off its managed services business unit into a separate company Zenith RMM LLC last month, according to a company statement on Sept. 28. Summit Partners LP, a Boston- based private equity firm, invested in the unit last month.

The software company will utilize funds received from Zenith RMM for to repay bondholders in part, the statement said.

Link to Statement:NSN LT058R3PR6RK <GO>

--Editors: Sam Nagarajan, Abhay Singh

To contact the reporters on this story: Anurag Joshi in Mumbai at ajoshi53@bloomberg.net; Anto Antony in New Delhi at aantony1@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net


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