Ebix's agreement with Zinnia lays out expeditious path for debt repayment
The company in a statement said that EbixCash and its 200 affiliates outside the United States are not impacted by the filing and will continue to operate normally
US-based supplier of on-demand software and e-commerce services Ebix on Monday said that it has reached a “stalking horse” agreement to sell its North American life and annuity assets to Zinnia, an Eldridge business and life insurance and annuity technology and service company.
The move is aimed at strengthening Ebix’s balance sheet and position the firm for its sustainable growth.
Earlier in the day, Ebix and its certain US affiliates had filed for protection under Chapter 11 under US Law. In the USA Chapter 11 there is a mechanism to provide protection to companies while they work through paying their debt.
Through this deal with Zinnia, Ebix has secured a floor price of 400 million USD for a US asset that would pay a substantial part of the debt leading to a possible expeditious coming out of Chapter 11.
“The sale of this US asset will serve to pay the US debt back expeditiously under a proper time-bound process over the next few months,” Ebix said in a press statement.
The statement added that the assets that are being sold, account for just 14.5 percent of Ebix’s worldwide GAAP revenues for the year-to-date 9-month period preceding 30 September, 2023.
“This implies that we are targeting to be a debt-free company soon while retaining our strong 85% plus business worldwide,” the company statement said.
About Chapter 11
Chapter 11 is a mechanism used to provide breathing room for companies while they work through their work through paying debt and other financial and operational issues. It is a step taken by US companies to get credit protection and to keep operating its business in normal course. Chapter 11 is a temporary measure.
No impact on EbixCash & other affiliated businesses outside US
The filing under Chapter 11 does not include EbixCash and Ebix’s approximately 200 affiliates outside the United States.
These firms will continue to operate normally, a company statement said.
“Ebix’s EbixCash & other companies in India, all international subsidiaries and their franchisees around the world are similarly not included in the Chapter 11 filing. All worldwide operations of the Company will continue to operate in the ordinary course and without any interruption. This news has no impact on EbixCash, its employees, partners or vendors,” the statement added.
The statement reiterated the financial health of the company with “fantastic operating fundamentals.”
