Coforge Limited has informed the Exchange about Facility agreement for availing of a loan facility of up to USD 550 Million
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Coforge Limited has signed a facilities agreement to avail a USD 550 million secured loan from a consortium of international banks including JPMorgan Chase, Bank of America, Citibank, HSBC, and BNP Paribas. The loan carries a fixed interest rate of 4.6% per annum with a 3-year tenor. The proceeds will be used to fund equity investments in Encora US Holdco, Inc. (USD 280 million) and Encora Holdings Limited (USD 270 million), as part of the company's acquisition of these target entities. The company has also completed the acquisition and allotted 93.8 million equity shares worth INR 17,032.6 crore to Encora Holdco Limited and AI Altius Parent (Cayman) Limited. Additionally, two new non-executive directors from Advent Private Equity have been appointed to the board.
This is a significant acquisition financing deal that enables Coforge to complete its strategic purchase of Encora. The large debt burden at a fixed 4.6% rate will increase the company's leverage, but the acquisition may expand its service offerings and client base. Shareholders should monitor the company's debt servicing capacity going forward.