Birla AT&T mops up $283 mn

Thursday, June 26 1997

Birla AT&T mops up $283 mn

ENS ECONOMIC BUREAU

NEW DELHI, June 25: Birla AT & T Communications has mobilised external commercial borrowings (ECB) to the tune of $283 million (Rs 1,000 crore) to part-finance its $1.5-billion (Rs 5,151-crore) project to build a cellular network in Gujarat, Maharashtra and Goa.

Birla AT&T, a joint venture between the Aditya Birla group and AT&T with the Indian partner holding 51 per cent, is licensed to provide cellular services in these states except Mumbai.

"The ECB, which is in the form of loans from Bank of America and Toronto Dominion, is the country's first-ever telecom project financing raised offshore,'' Birla AT&T chairman Kumar Mangalam Birla told a press meet.Syndication of the funds has been possible because of the creation of the Telecom Regulatory Authority of India (TRAI) and the finance ministry's decision to raise ECB limits to 50 per cent, he said.

According to Birla AT&T president and CEO Rajan Mathews, the joint venture has already committed Rs 3,451.80 crore as a fee for licence and another Rs 1,700 crore to establish the network and other related services.

The company has obtained permission from the Foreign Investment Promotion Board to increase the total paid-up capital to Rs 1,200 crore from Rs 525 crore. The company's strategic expansion plans for the first three years envisages the setting up of 350 cell sites and four mobile switching centres in the circuits.

The loan, he said, has been divided into a foreign currency portion and a rupee tranche. The funding, with a term of eight and a half years, is entirely non-recourse not requiring AT&T or the Aditya Birla group to offer corporate guarantees in this transaction,'' he added.

According to Birla, $65 million of the offshore tranche is supported by political coverage provided by the Swedish export credit agency EKN.

The rupee debt is to the tune of $26 million.Company chief financial officer VK Maloo said that of the project size of Rs 5,151 crore, Rs 530 crore total equity has already been brought in. The project will be funded by debt and equity in the ratio of 1.25:1.