iGate secures $360 m credit

iGate Corporation, on Monday, said that it had secured two lines of credit, which would save the company about $105 million over five years. Addressing his first media conference from New Jersey since taking over as CEO in September, Ashok Vemuri termed the credit arrangement aggregating $360 million as “seminal” in the company’s history.

While one tranche with a tenor of five years is for $270 million, the second arrangement is for $90 million with a nine-month tenor. The loans, financed by DBS Bank and ING in Singapore, have been arranged through iGate’s fully owned subsidiary.

Mr. Vemuri said the refinancing arrangement was meant to retire in part the company’s outstanding loans aggregating $770 million. He said the effective saving in terms of the interest rate would be about six percentage points, result in an annual saving of about $21.5 million. “This is not only a saving in terms of interest costs but will enable us to plough the money back as investments,” he said.

Mr. Vemuri refused to provide a revenue target for the company in the medium-term—it is currently a billion dollar company. “We are not yet in a position to provide quarterly guidance,” he said. The company needed to become operationally more “predictable and sustainable” to be able to do this, he said.  

  iGate would withdraw from markets where it was only involved in a “half-hearted” manner, Mr. Vemuri said. However, its operations in the NAFTA region would be designated as a “vertical” because of its critical importance as a source of revenues. The company is building a new delivery centre in Halifax.