Not passing clear control; won’t sack employees: Hexaware

Baring Private Equity decided to acquire 41.8 percent stake in Hexaware Technologies . The information technology services provider clarified that it was not passing total clear control to the firm. Hexaware's founder and chairman Atul Nishar told CNBC-TV18 that there will be no change in management after the deal. He also assured that employees will not be losing jobs on the back of this pact.

Also read: Baring to buy controlling stake in Hexaware for $420 mn

Below is the edited transcript of his interview to CNBC-TV18.

Q: I want to clarify on the pricing of the deal. In the share purchase agreement and in the press release, you have clarified that the deal is between Rs 126 to Rs 135 per share. That comes up to Rs 1575 crore to Rs 1687 crore as a whole. So, depending on if Baring's Private Equity touches around 50 percent it will be a higher amount can you just clarify this particular bit?

A: Promoters and General Atlantic (GA) together, we hold approximately 41.8 percent stake in the company. So, we are not passing on a clear control at this percentage.

The deal is that if Baring can get control by whatever methods including the open offer success, then the price goes to Rs 135 per share. The open offer in any case will be at Rs 135.

If, for any reason, they are unable to reach there and they do not gain the control that is 50 percent plus then the price paid to promoters and GA would be Rs 126 per share.

Q: The amount that you are looking at; Rs 1687 crore. Can you break this up? The sale will be for 41.8 percent. How much the promoters will be getting and how much will GA be getting?

A: GA would be getting USD 88 million; that is Rs 570 crore. The promoters would be getting USD 171.8 million. It would mean Rs 1,116 crore. So, if it is Rs 135 this is the value.

Q. When you are saying control you mean 50 percent or higher?

A: Yes 50 percent or higher. We are anyway giving 41.8 percent. So, let's say they are able to get this additional 8 percent plus, then that would be the case. So, USD 260 million would be the amount involved for GA and promoters.

Another USD 160 million assuming 26 percent open offer gets fully subscribed then that would be the amount involved.

Overall, it is around USD 420 million investments as on today. Since they will be eligible to go up to 75 percent and if they happen to then that would mean around USD 465 million of investment, which would make it one of the largest private equity investments ever in the IT space in India.

for the full interview on CNBC-TV18.

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