In an open letter, Zenith Infotech CEO Akash Saraf has responded to questions about the company allegedly defaulting on a bond payment. Saraf confirms the default but assures customers and vendors that Zenith Infotech is "financially solvent, strong and stable." Here's the letter in its entirety -- plus some perspective from MSPmentor.
The letter stated:
"To our valued customers, vendors and friends:
Recently it was reported that Zenith Infotech defaulted in its payment obligations to certain foreign-currency convertible bond holders. Although factually correct, the news coverage did not provide an accurate picture of the company’s business and financial stability.
Let me be clear: Zenith Infotech is financially solvent, strong and stable. Our customer base for BDRs, MirrorCloud and SmartStyle continues to grow tremendously.
Zenith Infotech provides state-of-the-art business continuity and private cloud services to customers worldwide, and will continue to do so into the future. Our employees are among the best in the industry, and our technology and innovation is both envied and unmatched.
We are actively discussing our debt obligations with our bond holders. We are optimistic that the process will result in financial terms that are acceptable to everyone. Our ongoing operations are not affected by this.
We are committed to continuing to serve your needs.
The Back StorySaraf's open letter arrives after Zenith Infotech defaulted on $33 million foreign currency convertible bonds (FCCBs), which were due Sept. 21, according to Reuters. Zenith Infotech's stock has fallen sharply in recent weeks on the Bombay Stock Exchange. Few people had heard about the default in September, but speculation about the situation spread across India's media earlier this week, and MSPs started contacting MSPmentor about the speculation on Sept. 12.
Separately, Zenith RMM -- which Summit Partners essentially acquired from Zenith Infotech in September -- says it continues to partner with Zenith Infotech. However, Zenith RMM CEO Michael George told MSPmentor that Zenith RMM is a separate, independent company from Zenith Infotech.
If/when Zenith Infotech announces a new agreement with its bondholders, MSPmentor will offer follow-up analysis.