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Key financial deals in the month of May 2014

May 29, 2014
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Vodafone gains full ownership of its Indian venture (India)

The UK-based Vodafone Group has taken full control of its Indian operations by acquiring Piramal Enterprises’ 10.97 per cent stake in Vodafone India for Rs 89 billion. The group had earlier acquired Analjit Singh’s 4.5 per cent stake in March 2014 for Rs 12.41 billion. The moves come after the Indian government allowed 100 per cent foreign direct investment in the telecom sector in mid-2013. Subsequently, in February 2014, Vodafone India received the cabinet’s approval to buy stakes from its minority Indian partners. Piramal Enterprises had acquired nearly 11 per cent stake in Vodafone India in two stages for a total of Rs 58.64 billion during the financial year 2011-12.

Goldman Sachs partly exits Bharti Infratel

Goldman Sachs has made a partial exit from Bharti Infratel by selling its 0.6 per cent stake for Rs 2.26 billion. The investment bank had invested about Rs 5 billion in Bharti Infratel in 2008 through its arms – GS Strategic (Rs 4 billion) and GS Investment Partners (Rs 1 billion)  – through a mix of equity and convertible debentures. Post-conversion, it is estimated to have held around 1.3 per cent in the company, which shrunk further with the initial public offering (IPO) in late 2012. In the IPO, GS Strategic sold one-third of its holding at par investment value in local currency, registering a loss of around 25 per cent on account of the depreciation of the rupee against the US dollar. Further, in the latest transaction, GS Strategic has sold off its entire remaining holding.

Aircel receives DoT’s approval for debt refinancing

The Department of Telecommunications (DoT) has allowed Aircel to raise over Rs 210 billion to refinance its existing debt. The department has agreed to sign a tripartite agreement with the State Bank of India and Aircel to raise Rs 145 billion as domestic lending and $1.18 billion (Rs 70.8 billion) as overseas borrowings against the company’s licences/spectrum in 15 service areas as collateral. In case of default, DoT has the right to auction Aircel’s bandwidth in the 15 circles and use the funds to repay the lenders. The 15 circles in which Aircel is pledging spectrum are Tamil Nadu, Karnataka, Maharashtra, Delhi, Mumbai, West Bengal, Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Kerala, the Northeast, Odisha and Uttar Pradesh (East and West). Aircel is the first telecom company in the country to avail of the spectrum-pledging facility to raise money. According to industry reports, Aircel’s debt stands at around Rs 240 billion at present. Data released by DoT in January 2014 shows that the company has a total negative worth of nearly Rs 42 billion.

Airtel secures loans of $95 million to finance upgrades (Bangladesh)

Airtel Bangladesh has secured two loans worth $45 million and $50 million from Standard Chartered Bank Mauritius and HDFC Hong Kong respectively. The funds will be used to finance the operator’s network upgrades. Airtel has already received the requisite no-objection certificate from the Bangladesh Telecommunication Regulatory Commission for the long-term offshore loans.

Dialog signs $115 million investment plan with BoI (Sri Lanka)

Sri Lanka-based Dialog Axiata has signed agreements with the country’s Board of Investment (BoI) to invest $115 million for expanding its nationwide telecom networks and digital satellite TV services. A subsidiary of Malaysia’s Axiata Group, Dialog and its fully owned subsidiary Dialog Television will invest the amount in information and communication technology infrastructure projects including 4G and 3G high speed broadband (mobile and fixed wireless), disaster recovery systems, and other technology modernisation and upgrades.

Zain Group secures $250 million loan to fund expansion (Kuwait)

The Kuwait-based Zain Group has secured a four-year Islamic loan worth $250 million from a syndicate of three Gulf banks – Boubyan Bank (lead lender), Kuwait International Bank and Qatar Islamic Bank. The funds will be used to meet the Zain Group’s operational and expansion financing requirements. Earlier, in March 2014, the group had secured a five-year $800 million revolving credit facility to meet its general corporate funding requirements. The lenders included Al Khalij Commercial Bank, Arab Bank, Arab Banking Corporation, Bank of Tokyo-Mitsubishi UFJ, Credit Agricole Corporate and Investment Bank, National Bank of Abu Dhabi, National Bank of Kuwait, Natixis, the Samba Financial Group and the Royal Bank of Scotland.

Tower Bersama plans $500 million bond sale (Indonesia)

Indonesian mobile tower infrastructure provider Tower Bersama is planning a $500 million bond sale to finance its expansion plans and repay its debt. The bonds will mature in 2021 and the company has set the coupon on the notes at a maximum of 8 per cent. Tower Bersama will sell these bonds through its Singapore-based unit TBG Global. The company would need its shareholders’ approval to go ahead with the bond sale. Tower Bersama is controlled by Saratoga Capital, an Indonesia-based private equity fund. It raised $300 million from selling a five-year bond in 2013.


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