Chennai-based Redington (India) Ltd is selling stake in non-banking finance company (NBFC) subsidiary, Easyaccess Financial Services Ltd (Easyaccess), to its promoter, the Singapore-based Kewalram Chanrai Group, for an undisclosed amount, as per a stock market disclosure.
It did not disclose the quantum of stake but said it can sell either partly or all of its holding in Easyaccess.
In 2008, IT products distribution major Redington had acquired Easyaccess, an NBFC, to help finance channel partners in the distribution network. Its investment in Easyaccess is pegged at around Rs 220 crore. It had total assets of Rs 501 crore and generated net profit of Rs 27 crore for the year ended March 31, 2013.
Easyaccess provides finance to the channel partners to enable them not only to carry on their trade, but to grow their business while ensuring better margins for Redington. Easyaccess also pursues financing the third-party corporates. Venturing into this business has reduced Easyaccess' dependence on Redington and its captive customers.
Its business activities include factoring of receivables exclusively for Redington, short-term financing to Redington’s channel partners, project finance to system integrators as well as non-Redington customers, etc. Easyaccess was affected by the new RBI norms related to factoring as a business.
Redington’s promoter Harrow Investment Holding (formerly known as Redington Mauritius Ltd, Mauritius), owns 21.04 per cent stake in the company and is part of Singapore-based Kewalram Chanrai Group.
The firm, which went public in 2007, is backed by Standard Chartered Private Equity which picked close to 12 per cent stake two years ago. Redington also counts US-based global IT products distributor Synnex as a strategic shareholder.
Two months ago, Redington acquired 48 per cent stake in Turkish IT services firm Adeo for $1.1 million.
(Edited by Joby Puthuparampil Johnson)