Tisco, Teleservices plan to raise $250m from IFC

Two Tata group companies Tata Steel and Tata Teleservices are looking at raising about $250 million from International Finance Corporation(IFC), the private sector arm of the World bank group, to fund their expansion plans.

IFC is amongst the largest multilateral source of loan and equity financing for private sector projects in the developing world.

Tata group sources said, "We are talking to IFC, for funding both the companies growth initiatives. It is a loan and there is no plan to allot any equity stake to IFC. For Tata Steel, we are looking at raising $100 million and for Tata Teleservices we are looking for in the region of $ 100 million --$ 150 million and the tenure of the loan would be 5-7 year period."

When contacted a Tata Teleservices spokesperson declined to comment. A Tata Steel executive stated that they have been approached by many financial institutions and IFC is one of them. However, a decision is yet to be taken.

Tata Teleservices, the closely held arm of the Tata group is currently rolling out a pan India presence for its CDMA business and aims to hike its subscriber base from 2 million to 6 million by end of 2005.

Tata Steel, has recently sought an enabling resolution to raise Rs 5,000 crore to finance its growth. As part of this investment initiative, the loan sought from IFC would be deployed in both organic as well as inorganic activies.

On the organic front, the company is the expansion of its current facilities situated in Jamshedpur and setting up a steel plant in Orissa. Tata Steel is also planning to set up a steel unit in Bangladesh.

Tata Steel has acquired the Singapore based NatSteel whose operations are spread across Singapore, China, Vietnam, Thailand, Malaysia, Philippines and Australia.