Polaris Financial Technology Ltd, a products and services company catering to Financial Services sector announced today the demerger of its Products (Intellect) business into an independent entity.
The company will be filing the Scheme of Demerger with the stock exchanges, SEBI and High Court as per extant regulations.
Post demerger and regulatory approvals of authorities and shareholders, the Product firm will be known as Intellect Design Arena Ltd (Intellect) and will have four businesses units- Global Universal Banking; Risk and Treasury Management; Global Transaction Banking and Insurance. Polaris will continue to run the Services business with a strong vertical and solution focus.
Based on the vertical split, Polaris Financial Technology Limited’s every shareholder will receive one share of Intellect. The Product business is significantly different from the Services, in terms of investments into product development, talent and sales and distribution.
Based on the recommendations made by the Special Committee comprising of independent directors of the Board as well as the Audit Committee, company’s board has decided to offer a special option to the shareholders of Intellect to exchange the shares (should they wish to) allotted pursuant to the demerger against fully secured non-convertible debentures (NCD).
These NCDs shall have a face value of Rs.42 with a coupon of 7.75% p.a., redeemable at par after 90 days. This strategic move to separate Services and Products businesses, is part of company’s 4 step vision of Polaris 4.0 started in January 2012.
“This is a decisive step towards unlocking the potential of the company to respond to emerging opportunities in Financial Technologies in the coming decade. In fact, it is a win-win for customers, employees and investors alike,” said Arun Jain, Executive Chairman, Polaris Financial Technology Ltd.
“From a customer perspective, this new structure aligns investments, competencies, decision making and processes to drive the next level of value creation. On one side, the customer will be able to enjoy deeper focus for his specific needs, say Services, while he would be able to accelerate his change-the-business agenda with truly next-gen Products,” he added.
Further, “From an employee perspective, alignment to their individual talent and interests will become a lot sharper, opening up clear streams for career advancement. From an investor perspective, on one hand, the shareholder will get an additional share of Intellect, a new horizon business. On the other hand, expanded leadership capacity, greater customer centricity and sharper focus will drive higher value in each of the businesses,” said Jain.
Manish Maakan will continue as CEO of the Intellect Global Transaction Banking (iGTB) business operating out of London; Jaideep Billa and Venkatesh Srinivasan will continue to be Joint Chief Executive Officers of Intellect Global Universal Banking and Intellect Risk & Treasury business, operating out of Singapore and Mumbai respectively; and Pranav Pasricha will continue to be Chief Executive Officer of the Intellect Insurance product business, based in New York.
Polaris Holdings Pvt. Ltd., whose name has been changed to Polaris Banyan Holding Pvt. Ltd., will continue to be the promoter of both the companies. Both companies therefore will operate as Polaris Group Companies, each with its independent management team and Board of Directors.