Bharti Cellular, the wholly owned cellular arm of Bharti Televentures, is raising a term loan of Rs 250 crore from the Industrial Development Bank of India (IDBI) and Infrastructure Leasing and Financial Services (IL&FS) to finance its new projects.
The company has signed a final agreement with IDBI and IL&FS on October 1 and October 10, 2001, respectively. As per the agreement, IDBI will offer a term loan of Rs 200 crore and the remaining Rs 50 crore loan will be provided by IL&FS.
Earlier, top Bharti Televentures executives said the group would fund its cellular expansion plans mainly through equity from the promoters. A part of funds will come from the proposed initial public offering of Bharti Televentures as well, they said.
In the case of the loan from IDBI, the loans would be utilised to part-finance the initial project related expenses for setting up the cellular networks in eight new cellular circles of Haryana, Uttar Pradesh (West), Gujarat, Maharashtra, Mumbai, Madhya Pradesh, Tamil Nadu and Kerala. The loan will not be used for investment in shares and any other related activities.
The interest rate will be reset and linked to the yield on one-year government securities and paid at quarterly rests, with the first interest payment falling due on January 1, 2001. The loan is repayable in one installment after 18 months, Bharti Televentures said in its offer documents for the proposed initial public offering.
For the loan from the IL&FS, which was taken to meet the medium-term business requirements of Bharti Cellular, the interest payable is 11.2 per cent per annum. The interest on the loan can be reset at the end of 12 months from the date of disbursement of the loan at a mutually agreeable rate.
