Amid reports of the company being put on the block, Chennai- based IT company Polaris Financial Technology on Tuesday announced the demerger of its products (Intellect) business into an independent entity.
The company will be filing the scheme of demerger with the stock exchanges, market regulator Sebi and high court as per extant regulations. After demerger, the product company will be known as Intellect Design Arena (Intellect) and comprise of four distinct businesses such as global universal banking, risk and treasury management, global transaction banking and insurance. Polaris will continue to run the services business with a strong vertical and solution focus.
Polaris Financial Technology executive chairman Arun Jain said, ?From a customer perspective, this new structure aligns investments, competencies, decision making and processes to drive the next level of value creation.?
As consideration for the demerger, every shareholder of Polaris will receive one share of Intellect. The product business is significantly different from the services stream, in terms of investments into product development, talent and sales and distribution.
The Polaris board, taking into consideration the recommendations made by a special committee comprising of independent directors of the board as well as the audit committee, has decided to offer a special option to the shareholders of Intellect to exchange the shares (should they wish to) allotted pursuant to the demerger against fully secured non-convertible debentures (NCD). These NCDs shall have a face value of R42, with a coupon of 7.75% per annum, redeemable at par after 90 days.
In January 2012, the IT company had announced the next phase of its growth journey, Polaris 4.0. Since then, the company has taken measured steps in four stages that led to the decision to de-merge.
As announced at the time of restructuring, Jitin Goyal will continue as CEO of the services business, and will be based in London. In the products entity, Manish Maakan will continue as CEO of the Intellect Global Transaction Banking (iGTB) business operating out of London, Jaideep Billa and Venkatesh Srinivasan will continue to be joint CEOs of Intellect Global Universal Banking and Intellect Risk & Treasury business, operating out of Singapore and Mumbai, respectively; and Pranav Pasricha will continue to be CEO of the Intellect Insurance product business, based in New York.
Polaris Holdings, whose name has been changed to Polaris Banyan Holding, will continue to be the promoter of both the companies. Both companies, therefore, will operate as Polaris Group Companies, each with its independent management team and board of directors.