Mumbai, February 25: Ruias' cellular venture partner, Swiss PTT, and equipment supplier, Siemens, have agreed to extend $100 million by way of guarantees, covering 41.66 per cent of an upcoming $240-million forex loan for Sterling Cellular, the licensee for Delhi circle.Lead managers to the foreign currency loan, expected to hit the international markets around March-April, are ANZ Investment Bank (ANZIB), Union Bank of Switzerland (UBS) and Credit Lyonnais.
Essar officials confirmed that "Swiss PTT and Siemens had agreed to issue corporate guarantees to the extent of $100 million." Telecom industry sources said that one of the reasons for the Ruias to seek guarantees from Swiss PTT and Siemens was to make the loan offering attractive to investors. International bankers had been clamouring for additional guarantees from Swiss PTT for their local partner, Essar. "Guarantee were a must...also those issued by either Essar or Sterling Cellular would not have sufficed", said sources.
Swiss PTT, sourcessaid, was initially reluctant to issue a guarantee. Two other fund-raising options for Ruia's cellular operations were also examined: Swiss PTT buys Essar holdings or invests in a fresh issuance of shares in the venture.
The Ruias and Swiss PTT are in talks for a 49 per cent stake in Sterling Cellular and also for a 24 per cent stake in its parent company, Sterling Computers, by the Swiss firm.
A 24 per cent stake for Swiss PTT in Sterling Computers is expected to coincide with the tying up of the long-term project finance requirements of Sterling Cellular.
"Essar stands to get a better price when they offload a 24 per cent stake in their holding company, Sterling Computers, if they tie up the long-term project finance part", said sources.
The Ruias had received the Foreign Investment Promotion Board (FIPB) nod on December 27, 1997 to offload a 24 per cent (12 lakh shares) stake in Sterling Computers to three overseas bodies, Asia Pacific Bonds, Asia Pacific Alliance and Asia Pacific Markets.
LateNovember last year, Swiss PTT spokesperson, Jacques Bettex, made a statement in the Swiss media (Le Journal Geneve) that "the company is redefining its financial organisation and participation strategy in India".
Copyright(c)1998 Indian Express Newspapers (Bombay) Ltd.
