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Financial briefs of February 2011

February 15, 2011
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Viom Networks plans to raise Rs 15 billion debt (India) 

Viom Networks is planning to raise Rs 15 billion through a mix of domestic and overseas borrowings from a consortium of banks led by Deutsche Bank. Other members of the consortium are German investment and development agency DEG, Bank of India and Bank of Baroda. The debt will be repaid over a period of 10 years. Interest rates on the external commercial borrowing and rupee finance are expected to be about 350 basis points above the London Interbank Offered Rate (Libor). These funds would be used to finance Viom’s acquisitions.

GTL Infrastructure to raise $400 million 

GTL Infrastructure is planning to raise up to $400 million through a stake sale and has appointed four investment banks – Goldman Sachs, Enam Securities, the Standard Chartered Bank and the Jefferies Group – to manage the issue. The stake sale will help the telecom infrastructure provider fund its expansion plans and repay debt. The company had a debt of about Rs 44.71 billion as of March 31, 2010. GTL, which currently owns 32,463 towers, is also planning to use the funds to expand its tower portfolio.

Tulip Telecom to offload entire stake in Qualcomm 

Tulip Telecom is planning to sell its entire 13 per cent stake in Qualcomm’s Indian broadband venture. The company has said that it would exit the venture as soon as Qualcomm sells its stake in its broadband venture. Qualcomm, which sold a 26 per cent stake in the company to Global Holdings and Tulip for $58 million last year, is also looking to exit the business. Qualcomm spent about $1 billion to buy broadband wireless airwaves in the Mumbai, Delhi, Haryana and Kerala circles last year.

Maxx Mobile plans IPO 

Indian handset manufacturer Maxx Mobile plans to raise Rs 8 billion through an initial public offering (IPO) in the next nine months. The Mumbai-based firm has appointed Enam Securities, Nomura and SBI Caps as the lead managers for the issue. The funds would be used to set up a handset manufacturing unit and starting the company’s retail venture. Maxx has already raised $20 million from Singapore-based Star Holdings and plans to go for a pre-IPO placement, most likely from a foreign investor.

Kavveri Telecom’s promoters to buy 20 per cent equity capital shares 

The promoters of Kavveri Telecom have made an open offer to buy 20 per cent equity shares in the firm at Rs 116.47 per share. The company’s founders, C. Shivakumar Reddy, R.H. Kasturi and C. Uma Reddy, who collectively held a 14.6 per cent stake in Kavveri Telecom at end-December 2010, will now buy back an additional 20 per cent stake or over 2.8 million shares through an offer that will open on March 30, 2011 and close on April 18, 2011. The telecom equipment manufacturer has an equity capital of Rs 100.7 million.

Spice Global plans to get listed on Singapore Stock Exchange 

After cancelling its listing plans on the Dubai bourse in 2009, B.K. Modi-led Spice Global, a Singapore-based company, is planning to get listed on the Singapore Stock Exchange and raise up to $1 billion. The funds would be used for telecom-related acquisitions in Africa and West Asia. Spice Global has a considerable presence in India, especially in the mobile segment.

ITI expects Rs 1.8 billion in government aid 

State-run telecom equipment manufacturer ITI Limited expects to receive a Rs 1.8 billion assistance from the government by March 2011 to finance its future projects. The company is seeking to turn around its weak financial health and contain losses. ITI posted a net loss of Rs 1.04 billion for the quarter ended December 2010, compared to losses of Rs 531.5 million for the corresponding period a year ago. The company’s business, which relies heavily on orders from Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited, received a major blow when BSNL decided to put its $6 billion network expansion plans on hold.

Cable & Wireless buys 51 per cent stake in BTC (Bahamas) 

UK-based telecom operator Cable & Wireless has signed a deal to purchase a 51 per cent stake in the Bahamas Telecommunications Company (BTC) for $210 million in a bid to strengthen its position in the Caribbean market. The company will finance the deal through its existing cash balances as well as debt facilities. The transaction currently awaits parliamentary and regulatory clearance, and is expected to be complete by April 2011. Cable & Wireless plans to implement a workforce restructuring programme within the first year of ownership of BTC.

Bangladesh Submarine Cable plans to launch IPO (Bangladesh) 

Government-owned undersea cable company Bangladesh Submarine Cable plans to raise up to BDT 310 billion ($4.4 billion) through a stock offering of 31 million shares. Each share has a face value of BDT 10, and the indicative price for the IPO is BDT 90 per share. The company will float these shares in keeping with the government’s policy to strengthen local capital markets and sell stake in state-run companies.

Telecom Italia sells 27 per cent stake in Etecsa (Cuba) 

Telecom Italia has sold its 27 per cent stake in Cuba’s Etecsa to Rafin SA for $706 million. Telecom Italia has already received $500 million from Rafin and the remaining amount will be paid in monthly installments over 36 months. The stake sale is in line with the Italian operator’s plan to reduce its debt and focus on growth markets in Argentina and Brazil, and domestic operations.

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