Mumbai: Information technology services company HCL Technologies Ltd has raised Rs500 crore as part of an effort to repay a debt of $585 million (about Rs2,836 crore) for acquiring UK-based software services firm Axon Plc.
Noida, Uttar Pradesh-based HCL informed the National Stock Exchange on Friday that it has raised Rs500 crore by issuing non-convertible debentures that would mature in five years.
The company also told the bourse that it has allotted 5,000 secured and redeemable non-convertible debentures of face value of Rs10 lakh each. The debentures will carry an annual interest rate of 8.8%, payable quarterly, and will be listed on the wholesale debt market segment of the exchange.
“At the time of declaration of financial results for the year ended 30 June 2009, HCL had informed that it had tied up the refinancing of the loan of $500 million taken from Standard Chartered Bank to finance the Axon acquisition,” an HCL spokesperson said.
HCL had borrowed $585 million from Standard Chartered Bank for the purchase in December last year and had paid off $85 million of that by 30 June.
The remaining $500 million will be repaid through a combination of bonds in the domestic market worth Rs1,000 crore and foreign currency loans of $300 million.
“The allotment of debentures of Rs500 crore is part of the above placement,” the spokesperson said.
A Mumbai-based market analyst who tracks HCL for a foreign financial advisory services firm said that the fresh rupee debt carries a higher interest rate than the the earlier foreign currency loan that had an interest rate of only 4.7%. The analyst asked not to be named as he is not authorized to speak to the media.
According to him, while the higher cost loan might not have a significant impact on the company’s balance sheet, it will increase its debt servicing burden.
HCL shares rose 1% to close at Rs312.90 on the National Stock Exchange on Friday, while the exchange’s benchmark Nifty index rose 0.21% to close at 4829.55 points.