Tata Communications raises $310 m

Written by Rachana Khanzode | Mumbai | Updated: Jan 21 2009, 05:00am hrs
In a bid to strengthen its liquidity position, Tata Communications has raised $310 million from three financial institutions. According to sources, the company has taken long-term funds from the Life Insurance Corporation (LIC) of about $230 million, Nataxis Bank about $35 million and $45 million from German bank KFW. LIC holds about 9.2% stake in the company.

Sources close to the development said that the firm has already raised this money and will be using it for the companys future growth and investment plans. However, it couldnt be ascertained what were the companys investment plans. For the quarter ended September 30, 2008, the company had reported a net loss of Rs 60.17 crore. Tata Communications has been considering and executing various funding options for its expansion and growth plans. The company had raised about $310 million in debt in October - November 2008, a company spokesperson said.

In the recent past, there were media reports stating that Tata Communications has informed the department of telecommunications (DoT) that there is serious shortfall of working capital in the company to meet its annual operating plan. In a bid to mobilise resources, Tata Communications had also decided to divest 36.6 million shares of Tata Teleservices at Rs 117.81 per share to NTT-DoCoMo in November last year for Rs 430 crore. NTT has entered into a definitive agreement with Tata Teleservices to acquire 26% stake through a fresh issue of 844 million shares and secondary sale by existing promoters such as Tata communications, Tata Power, Tata Industries and Tata Steel.