Escorts to invest Rs 1,100 cr in new cellular properties

Neeraja Kumar in New Delhi

Escorts is planning to invest Rs 1,100 crore to set up its operations in the four new circles for which it recently won licences to become the fourth cellular operator.

The company is aiming to start cellular services in these circles—Punjab, Rajasthan, UP (East), and Himachal Pradesh—by April 2002. The company plans to fund these investments half through debt and half through equity, according to Mr Escotel CEO Manoj Kohli.

The company is planning to float a new holding company for its telecom operations. 51 per cent of the stake in the new venture will be held by Escorts Limited, while the company is scouting for a foreign partner to offload the remaining 49 per cent.

While Mr Kohli said the company was yet to take a final decision on which foreign company would partner Escorts in this venture, he ruled out the possibility of entering into a liaison with First Pacific, the existing joint venture partner of Escotel.

The stake of Escorts Limited in Escotel Mobile Communications Limited and in Escorts Telecom Limted—a subsidiary that recently bagged the four new mobile licenses—will also be transferred to the holding company. Currently, Hong Kong-based First Pacific holds a 49 per cent stake in Escotel, while Escorts Ltd holds the balance 51 per cent. The company provides cellular mobile services in Haryana, Kerala and Uttar Pradesh (West).