Nahata: Cash concern

New Delhi, Aug. 9: Himachal Futuristic Communications Ltd (HFCL), the telecom service provider in Punjab as well as a telecom equipment manufacturer, is planning an overseas flotation to raise cash for its expansion plans.

The board of HFCL will meet on Friday to consider several options, including a flotation of global depository receipt (GDR), Euro-bonds and foreign currency convertible bonds.

“We have informed BSE and NSE about the decision to consider the GDR issue and other options to raise resources, which will be used for expansion purposes internally. This will be through a strategic investment by a financial institution and not a telecom company,” HFCL chairman Mahendra Nahata said.

“We need funds for various projects and this will be discussed at the board meeting this week,” he added.

The board will discuss the issue of equity, convertible debentures, optionally fully convertible debentures on preferential and private placement basis to be subscribed by Indian investors, non-resident Indians, private equity funds and financial institutions.

It will also examine the issue of shares, warrants, optionally fully convertible debentures on a preferential basis to promoters, directors, their relatives and associates.

A senior HFCL executive has ruled out equity sale in HFCL Infotel as part of the plans to raise resources. “There is no such move yet to sell equity in the Punjab circle. No doubt, the company has been exploring the opportunity and had discussions with a few leading operators like the Tatas and the Bharti Group. But the current discussion is purely for internal expansion.”

HFCL group company HFCL Infotel is valued at Rs 2,300 crore.

It is the first basic telephony services provider for Punjab. The company offers services under the brandname, Connect.

With an investment of over Rs 1200 crore, HFCL Infotel has set up a state-of-the-art network in over 66 towns and cities in Punjab.