Zenith Infotech Default Heads to Bombay High Court
By Jessica Davis |
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QVT Financial is taking Zenith Infotech to court on Oct. 26, having filed suit against the company, its promoters, all subsidiaries and private equity investor Summit Partners which bought a majority stake in Zenith RMM five days after Zenith Infotech defaulted on bonds held by QVT.
Zenith Infotech's bondholders, QVT Financial, have sued and will take the cloud company to a Bombay court on Wednesday, just a few weeks after Zenith Infotech defaulted on repayment of its bonds.
Moneycontrol.com reports the case will be heard in Bombay High Court on Oct. 26 and has been filed against Zenith Infotech, its promoters, all subsidiaries and private equity investor Summit Partners which bought a majority stake in Zenith RMM on Sept. 26, five days after the bond default.
Zenith Infotech's initial default was on $33 million in foreign currency convertible bonds. That default has apparently triggered remaining bonds to come due for a total of $85 million.
Zenith Infotech confirmed the default and issued a statement on Oct. 14 to partners and customers stating that the company is financially sound and that it is working to renegotiate the bonds.
Last week a spokeswoman told Channel Insider that Zenith Infotech would continue with its planned product roll outs and conference schedule.
Zenith RMM CEO Michael George has told Channel Insider that his new company’s first concern is to take care of its partner customers, including those who are supporting any of Zenith Infotech’s end points.
That said, George added that partners have asked that Zenith RMM look into some kind of guarantees or alternatives to help in case Zenith Infotech is unable to resolve its issues with bondholders.