Tata Teleservices (Maharashtra) plans to use the proceeds of the sale of its tower business to pay off some debt, invest a portion for GSM expansion and keep the rest for bidding during the 3G auction, a top company official said.
“We have a debt of Rs. 3,400 crore. We are looking at repaying some short-term debt and using the surplus for the remaining part of our GSM roll-out and 3G auction,” Tata Teleservices (Maharashtra) Managing Director, Mukund Rajan said.
The Tata group company has sold its tower business to Quippo-WTTIL for Rs 1,318 crore and expects to close the transaction by getting all approvals in the next few days, Rajan said.
“We had decided to divest our tower business more than a year back since it was not core to our business. We were waiting for the right valuation and we believe we have got it through this sale,” he said.
While Rajan would not reveal how much would be used for debt repayment, saying “we are working this out. It should be clear in the next few weeks, a certain proportion of the funds will be used to fuel its GSM roll-out.”
“We have completed the major part of our GSM rollout and we now need only one or two quarters of continued capital investment. We have also completed our CDMA rollout,” Rajan said.
According to Rajan, while some portion of the sale proceeds would be used for the 3G auction, the company has already obtained shareholder approval to up its borrowing limit from Rs 6,000 crore to Rs 8,500 crore.
The company also has shareholder approval to raise USD 250 million through any of a variety of instruments, including raising debt or equity, or through issuing GDRs or QIPs.
“In fact, we have multiple options. Funding should not pose a problem - our strategy is to have all approvals in place for the 3G auction,” Rajan said.
On the company’s roadmap for going forward, Rajan said it will focus strongly on sustaining growth in its wireless and wireline segments. “I see a tremendous opportunity in landline as well as in wireless broadband and landline broadband segments - these will be amongst our major thrust areas over the next three-years,” Rajan said.
