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Essar Exits Outsourcing Business With Aegis Sale

The Ruia family-promoted Essar Group has exited the business process outsourcing business with the sale of its entire stake in Aegis Ltd. as it continues to sell assets to pare debt.

Essar Global Fund Ltd. sold its holding in Aegis’ parent ESM Holdings Ltd. to private equity fund manager Capital Square Partners, according to a media statement. While the Essar Group didn’t disclose the deal size, wire agency PTI pegged it at $275-300 million, quoting sources.

Essar Group’s Chief Executive Officer Prashant Ruia had told BloombergQuint in January that the group’s aim was to reduce debt by $10 billion. In October last year, the group announced a $12.9-billion deal with a consortium led by Russia’s Rosneft to sell a stake in Essar Oil Ltd. Essar Power Ltd. and Essar Steel Ltd. too have been looking at stake sales.

Aegis has over 40,000 employees with a revenue of around $400 million, the statement said. The deal is expected to close in the first quarter of financial year 2017-18 after all the regulatory approvals are in place.

The sale is part of Essar’s strategy of incubating businesses and then monetising them at a premium when market conditions are favourable, according to Uday Gujadhur, director of AGC Holdings Ltd., a wholly owned portfolio company of Essar which owned the stake in Aegis.

Essar entered the BPO business in 2014 by acquiring then U.S.-based Aegis Communications Group, which had an employee count of 2,000. It started selling its outsourcing operations in 2014. Essar sold Aegis’ operations in the U.S., Phillippines and Costa Rica to France’s Teleperformance.

Article source: https://www.bloombergquint.com/business/2017/04/03/essar-exits-outsourcing-business-with-aegis-sale

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