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HCL to repay part of $585 mn Axon debt

April 22, 2009 17:40 IST

Software exporter HCL Technologies said Wednesday it will repay a part of the $585 million debt it had taken for acquiring UK-based Axon last year from its current cash balance and through a fresh loan.

"We had raised a debt of 5 million for acquiring Axon which is maturing in December 2009. We have a cash position of 2 million. We will pay the debt out of the cash and raise a small debt," HCL Technologies Executive Vice-President (Finance) Anil Chanana said after the announcement of the company's results in Noida.

The company, which follows a July to June financial year Wednesday reported a 42 per cent decline in its net profit to Rs 152.57 crore (Rs 1.52 billion) in the third quarter ended March 31, 2009.

HCL had acquired Axon for pound 441 million ($678 million) in December last year, funded partly by a short-term loan of $585 million. It had earlier said the $585 million debt, which is currently a short-term loan, is expected to be replaced with a longer term loan.

HCL Head-Enterprise Application Services Ram Krishna said the company is in half way through the integration process with Axon to meet the deadline which says 90 per cent of the absorption should happen before the end of this year.

HCL CEO Vineet Nayyar said six out of the 11 new contracts it has bagged in the third quarter of 2008-09 have contribution from the clients of Axon in the enterprise application business.

"EAS has contributed 24.7 per cent in this quarter against 12.5 per cent in the last quarter," Nayyar said.

Nayyar further added while the companies have already integrated their sales and marketing staffs and the back office, the delivery centres are currently being integrated and both the companies are chasing deals to cross sale each other.

"Both the companies are chasing 25 odd opportunities where they can sale each other's service. Three HCL customers have already been sold Axon services," Nayyar said.

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