7-year pact with IDBI Bank
Thomas K. Thomas
New Delhi, Aug. 8
Aditya Birla promoted Idea Cellular has raised Rs 4,224 crore debt from a consortium led by IDBI Bank. The debt for a 7-year period would be used to refinance old debt and fund expansion plans.
Mr Vikram Mehmi, Chief Executive Officer, Idea Cellular, told
Business Linethat Rs 3,000 crore would be used to refinance debts and the rest for expanding the company's existing mobile network as well as roll out new network in Uttar Pradesh (east), Rajasthan and Himachal Pradesh. The agreement between Idea Cellular and the bank was signed on Tuesday.
Idea Cellular is embarking on a major expansion plan over the next six months, to be funded through an initial public offering. The company has also applied for 12 more GSM-based cellular licences. The move will give the cellular company a pan-India footprint to compete with the likes of Bharti Airtel, Hutch and Reliance Communications. The Department of Telecom has approved its application for the Mumbai circle.
The company at present has licences for 11 circles, of which eight are operational. The expansion comes after the Birla Group took management control of the cellular company following the exit of the Tata Group. Idea Cellular has also taken the letter of intent for a long-distance telephony licence and is set to become an integrated telecom services player. Idea has nearly 10 million subscribers.