Mezzanine Private Equity Plays - Infomedia

One of the first buyouts of India, Infomedia was bought from the Tatas. It is India's largest provider of commercial information in the form of business directories branded as Infomedia Yellow Pages (earlier called Tata Press Yellow Pages). Currently, the company's diverse business areas include Business Directories, Magazine Publishing, Direct Marketing, Printing services, and Publishing Outsourcing. Infomedia is the market leader in Yellow Pages and Special Interest Publishing, and is one of the most respected contract printers in India. With offices in 18 cities and a 1500 strong team, it now has a national footprint and a strong all-India network for ad sales and distribution. The buy-out was made through an SPV formed by IAF Series I (fund managed by ICICI Venture) and was leveraged. The mezzanine fund has stepped in at the second phase and refinanced part of the buy out leverage in the SPV by subscribing to its Subordinated Optionally Convertible Debentures (SOCDs). The claims of the SOCDs are subordinated to the claims of the senior investor who has invested in secured Non Convertible Debentures. The SOCDs will bear quarerly interest coupons and will provide a high fixed yield through redemption premium. The tenure of the SOCDs is 2 years; however they can be repaid after six months. The entire indebtedness of the company has asset cover to the tune of 4 times, with the senior lender being covered at more than 6 times. There is adequate liquidity to service the interest payment to the debenture holders, further, I-Ven is stipulated to hold cash equivalent of one year of interest to be paid to the debenture holders.