ETHL Communications Holdings Ltd (ECHL), Essar Group’s holding company for telecom services, has raised Rs 4,280 crore through private placement of its zero-coupon bonds. The company intends to use the proceeds for its expansion plans, including mobile services and handset distribution.
The company has sold Non-Convertible Debentures (NCD) maturing in July 2011 at a yield of 9.15 per cent, compared with an indicative range of 8.5-9.5 per cent, and bonds maturing in December 2011 at a yield of 9.25 percent (against 8.75-9.75 per cent). The bonds were rated ‘AAA’ by Fitch Ratings, ECHL said in a statement issued here today.
The NCD issue was launched as book build in two separate series of up to Rs 2,250 crore, totalling Rs 4,500 crore. Base issue size across the two series was fixed at Rs 2,250 crore, with a right to retain oversubscription up to an additional Rs 2,250 crore.
Two sets of debentures with aggregate size of Rs. 2,140 crores each, with maturity in July 2011 and December 2011, are zero coupon bonds backed by a put option with the Vodafone Group.
Essar had earlier signed an agreement with the UK-based Vodafone group, when the latter had acquired Hutchison Whampoa’s stake in Hutch Essar, which included a put option to sell its 33 per cent stake in Vodafone Essar. Vodafone Essar is the joint venture company of Vodafone and Essar group.
“Barclays together with other lead managers have done a commendable job in presenting and executing the NCD issue to the investors in a timely manner,” said V G Raghavan, Essar Group’s Chief Financial Officer.
Barclays Capital was the coordinating mandated lead arranger and bookrunner. Deutsche Bank, ICICI Bank, J P Morgan India Pvt Ltd, Standard Chartered Bank and YES Bank were the mandated lead arrangers and bookrunners.
