Zenith Infotech Valuation Cut By Ernst & Young
Zenith Infotech‘s cloud computing business is worth about 67 percent less than previously estimated, according to a new valuation performed by Ernst & Young and carried out by last month’s order of the Bombay High Court. The new report takes into account March and June quarter financials, according to a report in the Times of India.
Zenith Infotech’s valuation is in question because the company defaulted in repayment of bonds in September 2011. Debt holders took Zenith Infotech to court in late 2011, but CEO Akash Saraf has repeatedly said that his company remains strong and financially solvent.
Zenith Infotech has said it is trying to renegotiate the repayment terms of the bonds, and the company appears to continue to soldier on, in spite of the ongoing court drama. For instance, in February 2012 Zenith Infotech announced an updated BDR platform that includes new virtualization capabilities — called Zenith BDR-G12.
Ernst & Young had originally valued the company at Rs 598 crore white Grant Thornton, the valuer hired by Zenith Infotech’s bondholders said it might be worth about Rs 200 crore. Ernst & Young’s new valuation values Zenith Infotech’s cloud computing business at Rs 194 crore.
MSPmentor has reached out to Zenith Infotech for comment, and we are keeping an eye on the situation.