Zenith Infotech Faces Questions About Alleged Debt Issues
Zenith Infotech is facing questions about alleged debt issues. The cloud computing company, which works closely with managed services providers, allegedly defaulted on a $33 million debt payment, according to Money Control, a financial portal in India. Bloomberg has now issued a similar report. As of this writing, MSPmentor has not been able to reach Zenith Infotech CEO Akash Saraf, based in India, for comment. But we’ve reached out to Zenith’s U.S. headquarters for potential comment.
The alleged Zenith Infotech debt issue surfaced in an October 12 report from FirstPost.com. The report stated:
FCCB (foreign currency convertible bonds) outgo has claimed its next victim. Zenith Infotech has fallen from Rs 190 to Rs 101 in a span of 5 days. The company has outstanding FCCB of over $77 million, out of which $27 million matured in September 2011. There are no signs of the company being able to pay the same or convert it into equity.
Now, a separate video report from Money Control, citing CNBC-TV 18, suggests Zenith Infotech has defaulted on $33 million in debt.
Zenith Infotech, which continues to offer cloud solutions to MSPs, in September spun off its Zenith RMM business. The RMM business includes remote monitoring and management (RMM) software and NOC (network operations center) services. Both Zenith Infotech and Summit Partners are investors in Zenith RMM.
Back at Zenith Infotech, the company’s stock continued to fall today (Oct. 13) amid the alleged debt issue.
Updated, 6:58 p.m. ET, Oct. 13: The Bloomberg coverage indicates Zenith Infotech confirmed the debt default, and stated that Zenith Infotech is negotiating with bondholders to extend the period for repayment.
Note: MSPmentor has not been able to directly confirm that Zenith Infotech has defaulted on any debt. We will post an update if/when we have more to report.