Earlier Post: Rolta India: Glaucus Research – “Rolta has fabricated its reported capital expenditures in order to mask that it has materially overstated its EBITDA”; Rolta India: Glaucus Research Rebuttal to Rolta Response

Glaucus Research issues a Second Rebuttal to Rolta – Reiterates Strong Sell rating on Delaware-Issued 2018 and 2019 Corporate Bonds

On April 16, 2015, we published a detailed investment opinion (the “Report”) on the 2018 and 2019 US$ bonds (the “Junk Bonds”) issued by the Delaware subsidiary of Rolta India Limited (“Rolta” or the “Company”). In our Report, we presented extensive analysis and evidence, which in our opinion, indicate that Rolta has fabricated its reported capital expenditures in order to mask that it has materially overstated its EBITDA. On April 20, 2015, Rolta issued a response (the “First Response”) which not only materially contradicted previous statements by the Company (including statements in its 2013 and 2014 bond prospectuses), but was also muddled, riddled with factual errors and deliberately evasive.

Following our Rebuttal on April 23, 2015, Rolta hastily issued a second response (the “Second Response”) on April 27, 2015 which attempted to create a he-said-she-said sideshow. Do not be fooled. Rolta is not addressing the major issues raised in our Report. Instead, Rolta has recycled answers, offered false equivalences, and deliberately conflated parts of our analysis, all in a vain attempt to distract from the underlying pattern of capital spending so dubious it appears simply fabricated. In this rebuttal, we focus on the key tenets of our investment thesis, which Rolta has still never addressed in any meaningful way.

We continue to firmly believe that the preponderance of the evidence suggests Rolta has fabricated its reported capital expenditures and that both bondholders and ratings agencies have failed to price this evidence into Rolta’s Delaware issued bonds. We continued to value the Junk Bonds at the recovery value of Rolta’s offshore assets, which we estimate to be US$ 0.16 on the dollar.