New Delhi, March 3: Mahanagar Telephone Nigam Ltd has decided to raise asecond tranche of Rs 1,000 crore from the market by March 31 this year. Thecompany has informed the government that "this was the right time" to raisethe money and is waiting for a nod to proceed with the formalities. Themoney will be raised via a bond issue.This will complete the company's borrowing programme for this year. Thecompany has to raise Rs 2,000 crore from the market for the Department ofTelecommunication (DoT).
Addressing a press conference here MTNL chairman & managing director SRajagopalan said the intial response to the issue which opened on March 1was good.
As reported in The Financial Express on Friday, the company iscalling bids in a coupon range of 10 to 10.75 per cent per annum for a5-year maturity period. The basic target is Rs 500 crore, with a greenshoeoption of an additional Rs 500 crore. The book is closing on March 9,2000.
MTNL is also talking to several telecom software companies for accquiring astake. "We are ready to pick upto 49 or even 51 per cent stake in thesesoftware companies", said Rajagopalan. He refused to divulge details aboutcompanies and added that the first round of talks was already over. Askedabout the financial performance for the current financial year, Rajagopalansaid the corporation was hoping to do better during the last quarter toneutralise the losses in revenue in the first three quarters.
"We will achieve a growth of at least 5 per cent in profit after tax thisyear, despite the negative impact of the tariff re-balancing", said director(finance) S Sundresan. The company had reported revenues of Rs 5200 crorefor the year ended March 1999.
The private placement issue for Rs 1,000 crore through book building routeis being managed by SBI Caps and is the first time that any Indian companyis using the Internet for raising funds. MTNL has co-opted services ofSatyam Infoway for designing the site. SBI Caps is the advisor and bookrunner for this private placement. Meanwhile Millenniun Telecom, a 100 percent subsidiary of MTNL, will have its first board meeting on March 16. Thecompany has also decided to appoint bulk franchisees for selling itsinternet service.
On the proposed launch of MTNL's GSM cellular services by the middle of thisyear, Rajagopalan said "we are committed to launch in time and initially wewould like to sell handsets along with the connections".
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.