**AGS Transact Faces Insolvency Proceedings Over Unpaid Dues**
AGS Transact Technologies, an Indian payments services provider, announced on Saturday that a creditor intends to initiate insolvency proceedings against the company due to non-payment of dues. Maxwel Aircon India Private Limited, an operational creditor, has claimed that AGS Transact has defaulted on repayments and is seeking to start corporate insolvency proceedings in the National Company Law Tribunal.
In response, AGS Transact stated that it is obtaining legal advice and will take necessary steps to safeguard its interests. The company offers digital and cash-based solutions to banks and corporate clients, including ATM services. Recently, AGS Transact defaulted on dues amounting to 7.26 billion rupees ($83.1 million), which has resulted in at least two credit rating downgrades and the resignation of all four independent directors, who cited personal reasons for their departure.
Credit rating agency Crisil downgraded the company’s debt rating on February 4, followed by India Ratings on February 5, indicating a potential risk of default on debt payments. The downgrades were attributed to delays in receivables, as AGS Transact struggled to meet service-level agreements with its customers, leading to a significant decline in liquidity and missed interest payments on term loans in December and January.
Since February 4, AGS Transact’s shares have plummeted 62.4%, reaching a record low of 18.97 rupees. The company also reported a loss in the December quarter, with its auditor expressing concerns about its ability to continue as a going concern. AGS Transact’s lenders include IndusInd Bank, Investec Bank, Aditya Birla Finance, IDFC First Bank, SBM Bank (India), State Bank of India, Bandhan Bank, HDFC Bank, Dhanlaxmi Bank, SBI Global Factors, Bajaj Finance, and Federal Bank.
