Information technology company Rolta India announced downsizing of its global workforce of 3,000 employees and has asked many to resign, Business Line reported.
Rolta decided to terminate employees following its inability to go ahead with a Rs 2,500 crore deal signed last year to divest the products and solutions business. Rolta was in talks with the UK-based Spectris, Germany-based ABB and India-based Tech Mahindra to sell the business.
The deal did not materialize as some of its domestic lenders did not give their approval, and dragged the IT services company to the NCLT for initiating insolvency proceedings.
Union Bank of India has filed a petition against the company in the Mumbai bench of the NCLT, making it one of the first major IT companies to be dragged into insolvency proceedings.
Rolta, which claims to have included in the S&P Global Challengers List, has a total debt of around Rs 8,000-10,000 crore.
Rolta group company earlier defaulted on the payment of bonds – it hold bonds worth $200 million maturing in 2018 and $300 million maturing in 2019 — last year and sought restructuring. Certain bond holders started demanding upfront cash.
The company, which was ranked among the “Best 200 under a Billion” four times in six years by Forbes Global, said in a letter to its employees dated January 3 that it suffered a major blow recently in its efforts to deleverage completely by paying off the entire debt in India and completing the bond restructuring agreement.
“We will downsize the present strength of Roltaites to form a core team who will look after the various functions of the company to protect its assets and technology, service its existing customers and enable it to come out of the current crises. All Roltaites who have already resigned will be released on or before January 31, 2019,” KK Singh, executive chairman, Rolta, said in his letter.
The company said it won a Rs 50,000 crore battlefield management project jointly with Bharat Electronics in 2015. Rolta claims the project, when implemented over the next 10 years, has a revenue potential of more than Rs 10,000 crore. It is expecting payments from the government from 2020.