Zenith Infotech Ordered to Disclose Zenith RMM Spin Off InformationBy Jessica Davis | Posted 2011-11-02 Email Print
A high court in Mumbai has ordered Zenith Infotech to disclose the details of the sale of a majority stake in Zenith RMM to private equity firm Summit Partners. Zenith Infotech sold the stake five days after it defaulted on convertible bonds held by QVT Financial.
The high court in Mumbai has ordered managed services platform provider Zenith Infotech to disclose the details of its recent sale of Zenith RMM to Summit Partners, the Economic Times of India reported.
The order follows a lawsuit filed by QVT Financial in the Bombay high court in late October in the midst of the Indian Diwali holiday against Zenith Infotech and its subsidiaries, as well as Summit Partners. QVT filed the suit after Zenith Infotech defaulted on $33 million in convertible bonds. The default triggered a call for immediate repayment on other bonds, leaving Zenith in default for $85 million.
The whole situation has left channel partners of Zenith Infotech and Zenith RMM wondering what is going on, whether they should be exploring alternative solutions to the Zenith Infotech offerings, and why the company has not provided more information about the ongoing dispute.
Here’s a quick timeline of events around the situation:
Sept. 21: Zenith Infotech defaults on convertible bonds held by QVT Financial
Sept. 26: Zenith Infotech spins off Zenith RMM, its remote monitoring and management platform when private equity firm Summit Partners acquires a majority stake in the spin off. (Zenith RMM CEO Michael George confirmed to Channel Insider that Summit indeed now holds a majority stake and Zenith Infotech holds a minority stake. But financial details of the deal or the percentage stakes have not been disclosed.)
Sept. 28: Zenith Infotech announces the spin off of Zenith RMM and the deal with Summit Partners.
Oct. 14: Zenith Infotech CEO Akash Saraf issues a written statement to partners, vendors and customers saying that while reports of the bond defaults are "factually correct [they] do 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." Saraf says that Zenith Infotech is negotiating with bond holders.
Oct. 26: QVT Financial files suit in Bombay High Court against Zenith Infotech, its subsidiaries, and Summit Partners, seeking disclosure of the details of the spin off deal of Zenith RMM.
Nov. 2: The court orders Zenith Infotech to disclose the details of the Zenith RMM, Summit Partners deal.
Channel Insider has reached out to Zenith Infotech and Zenith RMM, seeking details of the order and information about whether Zenith Infotech intends to comply with it.