Infosys on Friday announced plans to sell its portfolio business comprising its subsidiaries Skava and the controversial Panaya, thereby registering an impairment loss of Rs118 crore in respect of Panaya.
The IT services major also announced that it has acquired Wongdoody Holding, a US-based digital agency, for $75 million (See
: Infosys to acquire Wongdoody
“In the quarter ended March 2018, on conclusion of a strategic review of the portfolio businesses, the company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as "Skava”) and Panaya (collectively referred to as the “disposal group”),” Infosys stated in its earnings release.
The company expects to complete the sale by March 2019 and accordingly, assets amounting to Rs2,060 crore and liabilities amounting to Rs324 crore in respect of the disposal group have been reclassified as “held for sale".
On reclassification, the disposal group has been measured at the lower end of the carrying amount and fair value less cost to sell and consequently, an impairment loss of Rs118 crore in respect of Panaya has been recognised in the consolidated profit and loss for the quarter and year ended 31 March 2018. The disposal group does not constitute a separate major component of the company and therefore has not been classified as discontinued operations
By exiting the two subsidiaries, Infosys will have to write off $90 million in Panaya on a standalone basis and about half of the $200 million it paid in February 2015 to acquire the Israeli technology firm. The combined value of both the subsidiaries is $316 million, with liabilities of $50 million.
Parekh, who took over after Vishal Sikka resigned in August last year, has taken some major decisions that include rewinding the company’s strategy and focusing on digital opportunities.
These are “scaling our agile digital business, energising our client’s core technology business using automation and AI, employee reskilling and expanding our localisation efforts in the US, Europe and Australia”, said Parekh.