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Bharti clinches $ 315-m loan deal

Feb. 4: Bharti Tele-Ventures Ltd today tied up funds worth $ 315 million for its pan-India cellular operations to take on the challenge posed by the limited mobile services that threaten to erode the company’s cellular subscriber base.

Pegged as one of the largest international funding programmes in the telecom sector in the past two years, the funds have been arranged by ABN Amro as the lead arranger for Bharti Cellular Ltd, a wholly-owned subsidiary of Bharti Tele-Ventures Ltd.

The funding has been arranged at an approximate spread of 160 basis points over Libor and the foreign currency risk is fully hedged. The current overall cost is approximately 5.50 per cent per annum, including end-to-end costs such as foreign currency hedge costs. This long-term funding has an average tenure of over five years.

The money will be invested in expanding the mobile networks for Bharti’s AirTel services across India.

Announcing the funding tieup in Mumbai, Akhil Gupta, joint managing director of Bharti Tele-Ventures Ltd, said: “We are now fully funded and have achieved financial closure in all our projects. This sets us on course of a massive expansion and we are absolutely fully prepared on all fronts.

Strategically, the company has opted for the combination long-term foreign currency loans to diversify its investor base. The $ 315-million funding programme consists of three components: a $ 125-million syndication loan, a $ 160-million buyer credit facility and a $ 30-million suppliers credit facility.

A consortium of banks raised $ 125 million syndication loan with a door-to-door maturity of six years. The mandated bank for the syndication was ABN Amro. The lead bankers for this syndication also included DBS Bank, Standard Chartered Bank and West LB. The entire loan has been drawn down and the foreign exchange principal exposure has been fully hedged.

The company has received $ 160-million buyer credit facility with Export Kredit Namnden (EKN), Sweden acting as the Export Credit Agency (ECA) with a door-to-door maturity of 10 years. The lender of the facility is ABN Amro.

The disbursement of this loan is linked to the equipment supplies from Ericsson for which $ 30 million loan facility was raised from Nordic Investment Bank (NIB)with a door-to-door maturity of eight years.

Romesh Sobti, executive vice-president and country representative, ABN Amro India, said: “We fully support Bharti’s commitment to the telecom sector in India and are pleased to arrange one of the largest international fundings in the telecom sector. A wide distribution of bridge and long-term facilities to a diverse onshore and offshore investor base reflects the appetite of investors to invest in Bharti and demonstrates excellent distribution capabilities of ABN Amro.”

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