Information technology firm HCL Infosystems Ltd said it has received board approval to sell its Dubai-based subsidiary to financial firm Axis Investment Inc. for 4.12 million Emirati dirhams ($1.12 million or Rs 7.3 crore).
Dubai-based HCL Infosystems MEA FZE, which manages enterprise IT infrastructure, is fully owned by HCL Insys Pte. Limited. The latter is a wholly-owned Singaporean subsidiary of HCL Infosystems.
The deal, to be conducted through share purchase, will include HCL Infosystems MEA’s borrowings worth $660,000 (Rs 4.3 crore or AED 2.42 million).
The stock-exchange disclosure says Axis Investment Incorporated is promoted by a group of entrepreneurs backed by a Dubai-based investor group and an Indian IT major. It didn’t disclose their identities.
HCL Infosystems said the share-purchase agreement is expected to be signed on Wednesday. The deal is likely to be closed by the end of March, it added.
For 2016-17, HCL Infosystems MEA registered consolidated revenue of Rs 66.56 crore, which is 2.88% of the total revenue of HCL Infosystems for the period. As on 31 March 2017, the company’s net worth was minus Rs 1.02 crore.
HCL Infosystems, through Insys, first acquired a 60% stake in FZE, earlier known as NTS FZCO, for $6.45 million (Rs 28.65 crore) from Dubai-based NTS Group in July 2010.
In 2012, HCL Infosystems, again through Insys, bought the remaining 40% stake for an undisclosed amount.
Recent deals by HCL Infosystems
Earlier this month, HCL Infosystems agreed to sell HCL Services Ltd to Karvy Data Management Services Ltd for $16.79 million (Rs 108 crore). The deal includes tax refunds of Rs 87 crore.
In January, it agreed to sell HCL Computing Products Ltd to business service provider Quess Corp for $4.7 million (Rs 30 crore). HCL Computing provides after-sales services for mobile phones, consumer electronics and consumer durables.
In a separate disclosure, HCL Infosystems said Premkumar Seshadri has resigned as vice-chairman and managing director of the company. The board has appointed Rangarajan Raghavan, the president of the company, as the managing director with effect from 1 April.
Raghavan has been working at HCL Group since 1978.