From close to defaulting on its repayments six years back, Firstsource Solutions is set to turn debt-free soon. The outsourcing major, since its takeover by Sanjiv Goenka, has brought down its debt level by over 87% in the last quarter of the previous financial year and would pay off all its debt by the end of the third quarter of this fiscal. “We have fully repaid our $135 million term loan and $20 million external commercial borrowing, and the debt of $27.4 million would become practically zero by October and would reflect when we report our second quarter result,” managing director and chief executive officer Rajesh Subramaniam has told analysts.

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Sanjiv Goenka had acquired the loss-making FirstSource for Rs 640 crore in 2012 when the BPO firm had a debt burden of $215 million and was about to default on its loans. Under Goenka’s management, the debt level was progressively brought down through regular repayments.
 Firstsource Group USA Inc, a wholly owned subsidiary of the company, had availed $135 million term loan in May 2015 with the final maturity on March 2018 repayable in 12 installments. With the repayment of debt totalling $61.7 million in FY2018, Firstsource has brought down its aggregate debt level to $27.4 million as of March-end from $50.4 million as of December-end, Firstsource told analysts post earnings. And with interest burden coming down to Rs 8.4 crore from about Rs 10 crore during the year, FirstSource announced its maiden dividend of 15% on Monday.

Firstsource would try for a dividend payout of about 15% every year from now, he said. “During the year we have practically deleveraged the company on the back of improved cash flow generation and financial strength. Declaring a maiden dividend is a major milestone for the company,” chairman Sanjiv Goenka said in a release post earnings.

However, the headcount of the firm has dropped to 18,703 employees as on March 31, 2018, from a level of 19,226 employees as on December 31, 2017, a net reduction of 523 employees in the fourth quarter of last fiscal, contributed primarily because of the drop in on-shore employees to 9,894 from 10,376 employees based outside India in the third quarter, the company told analysts in a presentation.

(By Sumit Moitra, DNA)