Exicom Tele-Systems to Acquire Tritium’s Assets with ₹125 Crore Loan from Axis Finance

Exicom Tele-Systems Limited has entered into a significant financial arrangement by signing a Loan Agreement with Axis Finance Limited, a Non-Banking Financial Company (NBFC) registered under the Reserve Bank of India Act, 1934.

The agreement, signed on August 26, 2024, enables Exicom Tele-Systems to avail a secured loan facility of up to ₹125 crore. This loan facility is designed to support the strategic acquisition of assets from Tritium, an Australian company renowned for manufacturing electric vehicle (EV) chargers. The acquisition targets Tritium’s assets located in the United States and Australia and will be executed through Exicom’s wholly-owned subsidiary or step-down wholly-owned subsidiaries.

The financial facility provided under this agreement will also cover transaction-related charges, but notably, it is not intended for the purchase of land or any activities prohibited by regulatory bodies such as RBI, FEMA, or SEBI. This stipulation ensures that the utilisation of funds remains aligned with the intended strategic objectives of the company.

The loan agreement outlines several key terms and conditions that emphasise the security of the loan. These include the creation of a first pari passu charge through mortgage over all immovable assets, hypothecation over all movable fixed assets, and hypothecation overall current assets, both present and future.

Additionally, the agreement is backed by an irrevocable and unconditional guarantee from Mr Anant Nahata, adding a layer of security for the lender. The securities mentioned are to be shared on a pari passu basis with Exicom’s existing lenders, reflecting a collaborative approach to managing the company’s financial obligations.

The tenure of the facility is set for six years, starting from the date of the initial drawdown, with the loan repayable in 24 equal quarterly instalments. The interest rate on this loan is set at 10.75% per annum, payable monthly. However, the agreement includes a provision for interest rate adjustment based on the company’s credit rating. Specifically, if Exicom achieves an external credit rating of “A” from a recognised Credit Rating Agency, the interest rate will be reduced by 0.25%. Conversely, any downgrade in the credit rating will result in an interest rate increase of at least 0.25%.

On August 27, 2024, the share price of Exicom Tele-Systems Ltd opened at ₹400.95, touching the day’s high at ₹403.00, as of 9:37 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.