3i Infotech obtains tenders for $63.93 million, €20 million convertibles

New York, April 25 - 3i Infotech Ltd. said it received the necessary response to successfully complete its exchange offer and amend its existing bonds. Holders tendered $63,392,000 of its $100 million zero-coupon convertible bonds due July 27, 2012 and €20 million of its €30 million zero-coupon convertible bonds due April 3, 2012.

3i will issue $125,356,000 of new 5% convertibles bonds due 2017.

Meetings for the exchange were held at 5:30 a.m. ET on April 24 after an earlier meeting on April 2 failed to reach the necessary quorum.

At the meetings, the company was seeking amendments to the terms and conditions of the convertibles, including the maturity and coupon, and a waiver of existing defaults.

As reported when the exchange offer for the securities was announced in March, the effectiveness of the resolutions at the meeting is conditional on approval of the Reserve Bank of India. Based on communications with Reserve Bank of India, the company previously said that it does not expect to receive approval prior to the April 3, 2012 maturity date of the euro bonds.

Also already reported, the company does not expect to redeem the euro bonds on the maturity date, and that failure will be an event of default. Under a cross default, it will also been an event of default under the dollar bonds.

At the second meeting, holders of the euro bonds were asked to vote on whether to amend the terms of the bonds and waive the payment default, and the holders of the dollar bonds on whether to amend the bonds and waive the anticipated cross default.

Under the proposed amendments, the euro bonds will bear interest at 4.75% beginning April 3, and their maturity date will be extended to April 3, 2017. At maturity, they will be redeemed at 139.627% of par, and they will not be callable prior to redemption unless less than 10% of the bonds remain outstanding.

Under the proposed amendments, the dollar bonds will bear interest at 4.75% beginning July 27, and their maturity date will be extended to July 27, 2017. At maturity, they will be redeemed at 141.428% of par, and they will not be callable prior to redemption unless less than 10% of the bonds remain outstanding.

If approved, the resolutions at the April 24 meeting will annul any resolutions passed at the April 2 meeting. Holders are therefore encouraged not to vote at the April 2 meeting.

The agent is Deutsche Bank AG, London Branch (44 207 545 8000).

Exchange offer

In the exchange offer, the company is offering dollar-denominated 5% convertible bonds due 2017 in exchange for the existing bonds.

The tender offer is conditioned on the receipt of bondholder approval to make the amendments.

Holders will receive $1,383.50 principal amount of new bonds for each $1,000 principal amount of dollar bonds exchanged and $1,846.60 principal amount of new bonds for each €1,000 principal amount of euro bonds exchanged, subject in both cases to a minimum allotment of $200,000.

The offer was originally to expire at 11 a.m. ET on April 2. It began on March 22.

The dealer manager is Deutsche Bank AG, Hong Kong Branch (852 2203 6151 or 3i.eo@db.com).

3i Infotech is a Mumbai, India-based provider of software and information technology solutions.

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