Telecom equipment maker Himachal Futuristic Communications (HFCL) is looking at reducing its Rs 800-odd crore debt in the current fiscal. The company is also planning to raise funds by exiting non-core business such as entertainment and telecommunications.
The aim is to reduce the debt portfolio by around Rs 200 crore to 300 crore within the current year. "We intend to reduce the debt by one-third," C K Goushal, advisor-finance, said. A large part of the debt was raised during 2000-01 at around 14-15 per cent.
The company is looking at raising cheap funds through equity offerings abroad or through foreign currency convertible bonds.
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According to market grapevine, the company is planning to raise $40 million though a global depository receipts issue by the end of the current fiscal.
However, the plan is expected to fructify only when the domestic and global markets look up. Till then, the company is planning to raise money by exiting entertainment and telecom.
According to the company, certain investments make little business sense now such as investment in Consolidated Futuristic, several joint ventures and software. There are investments involving huge values such as AB Corp in which the company holds 28 per cent.
Goushal said the focus on core business is helping the company. For the current year, it has lined up orders worth Rs 1,000 crore from BSNL, MTNL, VSNL and the Tatas. The company recently added Reliance to its list.
The company has transferred its entire portfolio of investments and loans of Rs 1,650 crore to HFCL Trade Invest, a 100 per cent subsidiary. While this does not make any significant difference, the HFCL balance sheet does get a facelift.
To invest in its core business, HFCL has been selling its liquid investments. Some of these, especially into companies and mutual funds, are of significantly large values.