As Zenith Infotech attempts to negotiate new debt payment terms with bondholders, the company remains on the road engaging managed services providers (MSPs) across North America. In recent days, some MSPmentor readers have asked me if I think Zenith Infotech is financially stable and viable following the company's recent bond default. It's difficult for me to offer a pinpoint answer, since I'm not privy to the alleged discussions between Zenith Infotech and its bondholders. Still, I'm poking around for clues -- and one of them potentially involves Zenith Infotech's ongoing commitment to road shows and MSP-centric partner conferences.
According to an online calendar, Zenith Infotech is hosting a Cloud Revolution road show in November and December. Also, Zenith Infotech remains confirmed to sponsor a lengthy list of industry events -- such as this week's Tigerpaw User Conference and ConnectWise's upcoming IT Nation conference in November.
I've checked in with several third-party event organizers as well as hosting facilities (hotels, conference centers, etc.) that are associated with Zenith Infotech's event schedule. All of the third-party sources tell me Zenith Infotech remains confirmed to host or participate in the various events. In my mind, that's a potential clue Zenith Infotech CEO Akash Saraf is seeking a business-as-usual approach during the bond debate.
What's going on inside Zenith Infotech right now? That's difficult to say. The company apparently has not replied to U.S. media inquiries since Friday, Oct. 14. At that time, Saraf confirmed the bond default but assured partners and customers that Zenith Infotech was financially solvent, stable and strong. Some storage and cloud rivals are now reaching out to the Zenith Infotech installed base. And Zenith RMM, a recent Zenith Infotech spin-off, says it will continue to partner with Zenith Infotech even as it prepares to pursue additional cloud and storage partnerships.
Media Silence: Part of the Plan?I've reached out to Zenith Infotech the week of Oct. 17 for additional comment but have not heard back. Also, QVT Financial -- a hedge fund allegedly involved in the mix -- has not replied to MSPmentor inquiries.
Curious about such behavior, I've spoken with two CEOs who have also been involved in debt renegotiations within the past five years. Both CEOs told me it's not unusual for a company to temporarily halt PR communications and media comments amid debt negotiations. The idea is to set up a quiet zone between key parties and the court system, so that initial discussions don't spill over into the media.
Does that explain why Zenith Infotech and QVT Financial have gone silent with with U.S. media? Admittedly, that would be pure speculation on my part. Plus, CEOs with whom I've spoken point out that bond default discussions and debt negotiations can get bogged down for months -- and sometimes years -- in the court system. I don't know if the situation will be similar for Zenith Infotech.
Still, I'm poking around for clues that may potentially reveal Zenith Infotech's current financial state. The first clue comes from all those trade shows and partner conferences. So far, the initial evidence suggests Zenith Infotech remains on the road evangelizing SmartStyle Computing, MirrorCloud business continuity and Zenith BDR to MSPs. (We'll update this article if we spot any major or unusual changes to Zenith Infotech's presence at industry events.)