The Hindu Business Line : BPL Mobile group weighs options on fund-raising

THE BPL Mobile group is readying itself for action - action in the form of an IPO, bringing of a strategic investor into its fold, or even consolidation.

Its constituents - BPL Mobile, which operates in the Mumbai circle, and BPL Cellular, which operates in the circles of Tamil Nadu, Kerala and Maharashtra - can be legally merged within a few weeks should it be required, said Mr Sandip Basu, President and CEO of the group, at a news conference today.

"Operationally, the companies are already integrated; legally too we are evaluating and contemplating it." He added that this could happen through subsidiarising one of the companies into the other.

BPL Cellular is 100 per cent owned by BPL Communications. BPL Mobile is 74 per cent owned by BPL Communications and 26 per cent by France Telecom.

The BPL Mobile group, as of September 30, had increased its subscriber base by 80 per cent year on year, said Mr Basu.

Revenues grew 17 per cent during the first half of the current fiscal over the second half of the previous fiscal.

The group is targeting annualised growth of 45 per cent; projected revenues for the current fiscal are Rs 1,200 crore and projected operating profits Rs 450 crore.

The group is also targeting a subscriber base of three million by March 2005.

The group, as a whole, will be cash flow positive by the end of the current fiscal. The Mumbai circle would show a net profit, said Mr Basu.

The Mumbai circle's first-half operating profit amounted to Rs 120 crore on revenues of Rs 285 crore; the other circles reported an operating profit of Rs 65 crore on revenues of Rs 225 crore.

The Mumbai circle company has a debt of Rs 600 crore on its books, Rs 400 crore having been converted into preference shares last year. BPL Cellular has a debt of Rs 1,300 crore on its books. The average cost of debt is 7.5 per cent.

Refinancing could be done through either an IPO, issue of public bonds or by means of debt swaps, said Mr Basu. JM Morgan Stanley is the group's investment banker advising it on fund-raising and consolidation.

BPL Mobile had 19 per cent of the subscriber growth in Mumbai during the first half, while its competitor reported 16 per cent growth, he added.

The company plans to invest Rs 300 crore by March 2005, and would have added more than 350 cell sites during the current fiscal.

Three more mobile switching centres and two Intelligent Networks will also be set up, he added.