The Hindu Business Line : Rabo India gives Rs 450-cr loan to Escotel Mobile

RABO India Finance Pvt Ltd has provided a term loan facility of Rs 450 crore to Escotel Mobile Communications Ltd to facilitate its acquisition by Idea Cellular Limited (IDEA).

To facilitate the release of collateral and guarantees provided by the original sponsors of Escotel Mobile, IDEA has mobilised new lenders to refinance all debts of Escotel Mobile amounting to Rs 700 crore.

It is towards this that Rabo India Finance (RIF), lead underwriter, has provided a 7-year secured term loan facility of Rs. 450 crore, said a news release from RIF.

Earlier, IDEA signed a definitive agreement for the acquisition of 100% stake in Escotel Mobile in an all cash deal of Rs 275 crore by buying out the stake of Escorts Ltd and First Pacific of Hong Kong. One of the important pre-conditions for transfer of Escotel Mobile's shares to IDEA was the release of corporate guarantees provided by the original sponsors of Escotel Mobile as security for the latter's borrowings.

Mr Sanjiv Bhasin, CEO, Rabo India said, "Our support to Idea Cellular Ltd to facilitate the Escotel acquisition reflects our fullest commitment not only to the Indian telecom sector but also our assessment that IDEA will emerge as a major player in the Indian Telecom space."

"The financing support provided by Rabo India to Escotel facilitated the structuring of the refinancing package thereby consummating the acquisition transaction. As a result of this transaction, the borrowings of Escotel would now be aligned with the expected cash flows of the company," said Mr Vikram Mehmi, Chief Executive Officer, Idea Cellular.