BSE-listed IT outsourcing services provider LGS Global Ltd, which is in a reverse merger with digital marketing solutions company Ybrant Digital, is looking to raise up to Rs 1,500 crore through a variety of instruments including Singapore Depository Receipts (SDRs), Global Depository Receipts (GDRs), foreign currency convertible bonds (FCCBs) or other equity-linked instruments. LGS is also looking to increase its borrowing capacity to Rs 1,500 crore and be able to mortgage assets for a similar amount, according to a filing.
In a surprise move in August this year, the two companies entered into an all-stock deal valued at nearly Rs 2,500 crore, with a swap ratio of six shares of LGS for every share of Ybrant. The company is also shifting base from Hyderabad to Chennai as it feels that the new location ensures a more stable and business-friendly environment and also offers better manpower and developed infrastructure, among others.
The funds are being raised for expansion, potential acquisition, long-term working capital and capital expenditure requirements of the company and its subsidiaries. Hyderabad-based Ybrant, which has raised over $100 million in equity and debt from investors like Oak Investment Partners and GE Asia Pacific Capital, has been a fairly aggressive player in its inorganic bets.
In the past five years, Ybrant has acquired and integrated seven businesses across the globe, the latest being Israel-based Web 3.0, in which Ybrant acquired a minority stake in June in an all-cash deal. Late last year, it had acquired Internet and search portal Lycos, a US-based subsidiary of Daum Communications of Korea, for $36 million in a stock deal.
The share price of LGS Global closed at Rs 79.35 per unit on Wednesday, up 0.57 per cent. Incidentally, the share price of the company has shot up nearly 60 per cent in the past three months since the deal was announced.
Ybrant Digital To Merge With BSE-Listed LGS Global