The Hindu Business Line : TataCom to raise Rs 3,000 cr via rights, debt

NEW DELHI: Tata Communications (formerly VSNL) has approached the government, a 26 per cent share- holder, for a right issue to raise Rs 1,000 crore and another Rs 2,000 crore through debt to finance acquisitions in the US and the UK and bid for spectrum for wireless broadband.

Tata Communications is planning to deploy part of the funds for its new submarine cable projects and possible acquisitions in the managed services space, company sources said, indicating that a few targets in the US and the UK are being evaluated in the wake of their lower valuations.

They, however, declined to give details of the target companies. The company has written to both its major shareholders, Tata Sons and the Government of India seeking new equity infusion through rights issue and has also approached select institutions a nd banks for raising funds.

About Rs 1,000 crore would be raised as equity through a rights issue and the rest would come from additional debt, they said, adding that additional funds could therefore serve as a war-chest for such attractive deals.

Tata Communications has been trying to raise equity since April 2008 but has not yet received Government nod to the proposal.

It is unlikely that the Government would subscribe to a rights issue and if the company goes ahead with the issue government's stake will be diluted below 26 per cent.

When asked about its plans for a rights issue, the company spokesperson said the company continues to evaluate all options to raise funding to support its investment plans. No decision has been made in this regard. - PTI

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