Essar Group to exit JV with Vodafone (India)
The Essar Group has decided to exit its joint venture (JV) with Vodafone in India. Essar has demanded $600-$700 million for its 33 per cent stake in Vodafone Essar, in addition to the previously agreed $5 billion. The group is likely to invoke a Reserve Bank of India (RBI) resolution that stipulates a minimum value for Indian shares in privately held companies. The April 2010 RBI resolution mandates that shares held by Indian companies in private firms should be valued under the discounted cash flow method. Under this method, Essar?s 11 per cent stake in Vodafone Essar is worth $1.8-$1.9 billion, while the purchase option valued it at $1.2 billion.
TTSL to buy out Virgin Group?s 50 per cent stake in Virgin Mobile India
Tata Teleservices Limited (TTSL) has agreed to buy out the Virgin Group?s 50 per cent stake in Virgin Mobile India. The financial details of the deal have not been disclosed. The Virgin Group had signed two business agreements with the Tata Group in 2008. One of these agreements was for a 50:50 JV for marketing mobile services on a revenue-sharing basis and the other was a branding arrangement that allowed TTSL to use the Virgin brand against payment of royalty. While the JV is reportedly being dissolved, the two companies will continue with the branding arrangement.
ETHL Communications Holdings pays back Rs 42.3 billion loan
Essar Group-owned ETHL Communications Holdings has paid back loans worth Rs 42.3 billion ahead of the due date to free the 10.97 per cent stake it held in the Vodafone Essar JV. ETHL Communications raised these funds in the form of non-convertible debentures on the back of the value of the 11 per cent stake it held in the company.
IDFC lends Rs 5 billion to TTSL
Infrastructure finance company IDFC has lent Rs 5 billion to TTSL as a long-term debt for implementing its expansion plans. This is a six-year bullet loan with a put and call option at the end of every three years. TTSL plans to raise both debt and equity to finance its capex. Going forward, it also plans to raise funds by partly selling its 50 per cent stake in mobile tower operator Viom Networks.
NTT DOCOMO to invest Rs 8 billion in TTSL
NTT DOCOMO, which currently holds a 26 per cent stake in TTSL, plans to invest Rs 8 billion in the company. The investment is part of DOCOMO?s strategy to expand its Indian business. Meanwhile, TTSL is planning to raise Rs 30 billion through a rights issue in two tranches. The operator will use the fund to expand its 3G mobile services.
NIB provides $100 million loan for Aircel?s 3G network
The Nordic Investment Bank (NIB) and Aircel have signed a $100 million loan agreement for financing the latter?s 3G network rollout in India. The loan has a 10-year maturity. Aircel will use the funds to finance 3G and broadband wireless access projects. The operator expects to treble its subscriber base to 156 million and increase its market share to 13 per cent in eight years.
SSTL issues equity shares against Rs 26,998 million funds
Sistema Shyam TeleServices Limited (SSTL) has issued 547.31 million equity shares to the Federal Agency for State Property Management of Russia against funds worth Rs 26,988 million received in December 2010. Prior to this share allotment, SSTL issued 190.65 million equity shares to its existing shareholders including the Indian promoter, the Shyam Group. As per the revised shareholding structure of SSTL, the Russian government holds 17.14 per cent stake, Sistema holds 56.68 per cent, the Shyam Group 23.98 per cent and the public 2.2 per cent.
Sloka Telecom receives $600,000 from KITVEN
Sloka Telecom has received $600,000 from the Karnataka Information Technology Venture (KITVEN) Capital Fund. The equipment manufacturer plans to use this capital to boost its manufacturing logistics, supply chain and marketing divisions. KITVEN is managed by the Karnataka Asset Management Company and has contributions from the Karnataka State Industrial Infrastructure Development Corporation, the Karnataka State Financial Corporation and the Small Industries Development Bank of India, among others.
STC increases stake in PT Natrindo Telepon Seluler (Indonesia)
The Saudi Telecom Company (STC) has increased its stake in Indonesian telecom operator PT Natrindo Telepon Seluler (NTS) from 51 per cent to 80.1 per cent. The company bought the stake from another shareholder, Malaysia-based Maxis Communications, which has reduced its ownership to 14.9 per cent. As a result of the agreement, STC and Maxis Communications have decided to restructure their joint investment in NTS, which trades under the Axis brand. STC is planning to provide a $81 million loan to Axis and has committed another $290 million, whenever necessary, as part of Axis?s five-year plan. On the other hand, Maxis will cancel its loans worth $412 million to Axis.
China Telecom to issue $153 billion corporate bonds (China)
China Telecom is planning to issue 10 billion yuan ($1.53 billion) in the form of corporate bonds. The underwriters for the issue include Goldman Sachs Gaohua Securities, China International Capital Corporation Limited and UBS Securities. The company issued one-year bonds worth 10 billion yuan in March 2011.
