Soon after announcing the $500 million deal to divest 60 per cent in GE Capital International Services (Gecis) to General Atlantic Partners and Oak Hill Partners, Pramod Bhasin, President & CEO, Gecis, spoke to Business Standard. Excepts.
Why has GE exited at a time when valuation of ITES companies is declining?
We have got what we had in mind. We are very happy with the valuation.
Does the divestment mean that GE has the right to look at other BPO vendors in India?
GE has already exercised that right in Europe. It could do that here also. There are no free lunches. Not at least in GE. Anyway, for almost 40 to 50 per cent of what we do, there is no competition in India.
With new investors in the company, will the terms and conditions on which you do business with GE change?
The terms and conditions will remain mostly intact, though there could be a minor tweaking.
The money from the deal will go to GE and not Gecis.
Gecis is a good cash flow company and there is enough cash on our balance sheet to service our needs.
One thousand people from Gecis are being retained in GE. Who are these people? Do they represent the cream of the Gecis team?
These agents are for GE's extremely sensitive customers in the US consumer finance business.
When did you start working on this deal?
We started to think about Gecis in the overall GE's strategy about two years back. But, it was only about a year back we got down to evaluate it. We looked at things like its strategic positioning in the company, what is the way forward for the business etc. Then we decided that bringing in a strategic investor will add a great value it.
Did you engage an investment banker in this deal?
We were assisted by Salomon Smith Barney in the deal. It gave us some advise on the background. But, all the negotiations were done by GE.
Are margins in the ITES business under pressure?
Demand is not an issue in the industry today. It all depends on what value you can add to your services.
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