Essar delists BPO subsidiary Aegis in consolidation move

MUMBAI: The Essar group has delisted its US-based BPO subsidiary Aegis Communications Group (ACG) from over-the-counter bulletin board (OTC BB) of Nasdaq. Aegis was delisted at an equity valuation of $57.4m. The move is part of the Essar group’s strategy to consolidate holdings in various businesses under a single overseas entity, Essar Global.

Aegis is a $ 150m firm with over 10,000 people in India and the US. It offers multi-channel customer relationship management and operates from 24 centres and 18 cities around the world. Delisting makes Aegis one of the largest privately held BPO companies in India with cross border delivery capabilities.

The group delisted Aegis Communications through a short form merger process after getting the approval from the Securities and Exchange Commission. A special purpose vehicle, ACG Acquisition, was floated for merging this SPV into Aegis US.

The delisting process was initiated on September 19, ’06 and completed a few days back. Essar officials confirmed the development.

Sources said the low volume of trading was also one of the reasons behind the move. Of the volumes, only 6%-8% was retail. Besides the costs associated with public filing ($0.5m) were high and the company was keen to restrict the data available with the competitors.

Aegis US is held by the Essar Group through Aegis BPO Services, which owns World Focus. Mauritius-based World Focus is an Essar affiliate that owned 94.84% of Aegis Communications. The Essar Group has been restructuring the complex shareholding in its companies for almost an year now in a bid to reduce cross holdings. Essar Global, the holding company for the Essar group’s businesses in India and overseas, is based in Cayman Islands.

In November ’03 Essar and Deutsche Bank had bought 80% share in Texas-based Aegis for $28m. The purchase was part of Essar group’s foray into IT and ITeS businesses. Subsequently, Essar group increased its stake in the company.