Tata Teleservices Maharashtra Ltd (TTML) said the firm has received necessary approvals from shareholders that authorise the board of directors of the company to raise Rs 8,500 crore. TTML earlier had borrowing powers of up to Rs 6,000 crore, which the firm felt was not adequate, considering it is participating in the ongoing 3G auctions.
Speaking at the company?s extraordinary general meeting (EGM), chairman Kishore Chaukar said the firm would evaluate all options including GDRs and QIPs to raise funds. ?These funds would be used to bid for 3G auctions in April 2010 and expansion of CDMA and GSM plans.? Chaukar also said that the firm is expecting an indirect impact on the operations of the company on account of changes in service taxes and increase in prices of petrol and diesel.
The increase in debt, if TTML opts for it, will hurt the balance sheet of the company on account of its existing debt. TTML in a statement to the exchanges said that it has already taken loans worth Rs 4,514 crore, which includes Rs 1,616 crore non-fund based borrowings like letter of credit, as of February 2010. In November 2009, Mukund Rajan, managing director at TTML, had said the firm had a capex of Rs 1,000 crore in this financial year and had indicated expansion of capex with respect to 3G auctions.
The 3G auctions of 2.1 GHz spectrum that kicked off on April 9, 2010, are only for four slots of 5 MHz each in Mumbai and Rest of Maharashtra circle, out of which one slot has already been allotted to MTNL/BSNL. The 3G bidding would be done by Tata Teleservices Ltd (TTSL) on behalf of TTML as required under the bidding process.