Tuesday, May 17, 2011

3i ICICI Infotech Sells Its Unit In The US


This is interesting. It is not often that a company merges / demerges / acquires / sells with an expectation to reduce earnings per share. As per their global CEO, the EPS was expected to come down post sale (http://www.moneycontrol.com/news/business/us-arm-sale-to-reduce-eps-by-re-1fy12-3i-infotech_543846.html).

By reducing debt, wouldn't the interest come down enough to offset reduction in earnings? 

Is getting cash so difficult that one would do something that reduces EPS? 

There is more to this than meets the (3) eye.

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