Ebix exits bankruptcy with new ownership structure

Ebix Inc . (OTC Pink:OTC:EBIXQ), a global provider of software and e-commerce services to the insurance, financial, and healthcare industries, has emerged from Chapter 11 bankruptcy with a new ownership structure, as disclosed in a recent Form 8-K filing with the U.S. Securities and Exchange Commission.

On Friday, the company announced the effective date of its reorganization plan, which was previously confirmed by the U.S. Bankruptcy Court for the Northern District of Texas. As part of the plan, all existing common stock and equity interests were canceled, and the Plan Sponsors, consisting of Eraaya Lifespaces Limited, Vikas Lifecare Limited, and Vitasta Software India Private Limited, received 100% of the new equity in the reorganized company.

The reorganization also involved the creation of a Litigation Trust to manage and distribute the General Unsecured Claims Recovery Pool (NASDAQ:POOL) and oversee certain aspects of the company's liquidation process. The trust was established under a Litigation Trust Agreement with Broadbent Advisors LLC, with Gary Broadbent serving as the Litigation Trustee.

Furthermore, as part of the restructuring, the company's board of directors underwent significant changes. Robin Raina, who served as CEO, and Dr. Vikas K. Garg are the only remaining directors following the departure of several board members and the resignation of the Chief Financial Officer, Amit Kumar Garg.

The company's emergence from bankruptcy marks the termination of a range of prepetition indebtedness and the cancellation of all existing equity interests. The reorganized Ebix will no longer have any common stock reserved for future issuance related to claims and interests filed under the Plan.

Ebix's common stock, which was previously listed on the Nasdaq Stock Market, was delisted earlier this year and currently trades on the OTC Pink Marketplace. The company plans to file a Form 15 with the SEC to terminate its duty to file periodic reports under the Exchange Act.

The information contained in this article is based on the company's SEC filing.

Ebix has reached a restructuring agreement with a consortium including Eraaya Lifespaces Limited, Vikas Lifecare Limited, and Vitasta Software India Private Limited. The consortium will acquire 100% equity in the reorganized Ebix entities in exchange for a $145 million investment.

Furthermore, Ebix has submitted its monthly operating reports, providing the latest snapshot of the company's financial status. As of June 30, 2024, Ebix reported total assets of approximately $533 million and total liabilities of around $1.05 billion.

InvestingPro Insights

As Ebix Inc. charts a new course post-bankruptcy, it's crucial for investors to consider the current financial metrics and market sentiment. According to InvestingPro data, Ebix has a notably low Price/Earnings (P/E) ratio of 0.06, suggesting the market may undervalue the company relative to its earnings. Furthermore, the company's revenue for the last twelve months as of Q3 2023 stands at $735.63 million, although it has experienced a decline of over 30% in that period. These figures indicate significant shifts in the company's financial landscape that stakeholders should monitor.

InvestingPro Tips highlight that management has been actively buying back shares, which could signal confidence in the company's future prospects or an attempt to support the stock price. Additionally, the stock is trading at a low Price/Book multiple, which could attract investors looking for potentially undervalued opportunities. However, analysts are anticipating a sales decline in the current year, which may temper expectations for a swift financial turnaround. For a more comprehensive analysis, investors can explore the full suite of 14 InvestingPro Tips available at https://www.investing.com/pro/EBIXQ.

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