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Tuesday, Jun 11, 2002

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Bharti Mobile plans Rs 95-cr NCD issue

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MUMBAI, June 10

BHARTI Mobile Ltd (BML) proposes to make a secured redeemable non-convertible debenture (NCD) issue of Rs 95-crore backed by a guarantee-cum-take out agreement from Infrastructure Development Finance Company Ltd (IDFC).

The proposed issue has received an `AAA(SO)' (`Triple A structured obligation') rating from Crisil.

"This rating indicates highest certainty regarding timely payment of financial obligations on the instrument,'' said a news release from Crisil.

The rating is based on the strength of the guarantee-cum-take-out facility provided by IDFC securing all principal and interest obligations on the NCDs, the legal opinion furnished to Crisil indicating the enforceability of the said guarantee-cum-take-out facility, the payment structure designed to ensure full and timely payment to the investors and also the strength of a set of warrants furnished by BML, said Crisil.

The warranties furnished by BML include, inter alia, a commitment to operationalise the guarantee structure before the issuance of the rated debentures. BML has also provided a warranty to satisfy all the necessary covenants to ensure that the aforementioned guarantee is valid till all financial obligations on the instrument are fully paid off, said the rating agency.

The guarantee and payment structure shall be monitored by a trustee specifically appointed for this purpose. The payment structure envisages the funding of a designated account by BML 5 days before the due date for payment of interest obligations on the rated instrument.

In the event of this funding not materialising, the Trustee would invoke the aforementioned guarantee on the same day. IDFC, being the guarantor, would then make available the required funds into a designated account, one day before the due date. The funds shall then be paid out to the investors on the due date. As regards the principal repayment, the same would be made by IDFC vide a take out notice to be issued by the trustee.

Bharti Mobile Ltd provides cellular telephone services in the states of Karnataka and Andhra Pradesh.

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