Lic To Sanction Rs 75 Crore For Agrani Satellite Project

Agrani Satellite Services has received an in-principle sanction for a Rs 75 crore rupee term loan from the Life Insurance Corporation (LIC) of India.

Agrani officials said the company had recently received a letter to this effect from LIC. The total rupee loan for the company's satellite project is Rs 690 crore, while the balance will come as promoters' equity and debt. The Rs 1,197 crore project is likely to have a 3:2 debt-equity ratio. Agrani hopes to achieve financial closure of the project shortly.

LIC had discussed the investment issue at its investment committee meeting on July 25 in Mumbai, sources close to the development said. Agrani Satellite is a subsidiary of the Subhash Chandra-promoted ASC Enterprises.

Institutions (including Industrial Finance Corporation of India) have already committed a term loan of Rs 30 crore to Agrani, while the Small Industries Development Bank of India has given an in-principle sanction of Rs 50 crore, sources said.

The company is also in discussions with a number of banks and institutions for debt funding. Earlier, the Industrial Development Bank of India had given an in-principle sanction for Rs 300 crore to the company.

The company claims that it will be the first private sector initiative in the country to establish a satellite system on a fast-track mode to take advantage of the market opportunities.

Agrani Satellite is looking at business opportunities in the transponder-leasing sector of the satellite industry. It will establish and operate the satellite system infrastructure, and offer capacity to service providers and other corporate/institutional users.

The Agrani satellite is scheduled to be launched by the end of 2002. Arianespace, which is investing in the project along with Alcatel of France, has been identified as the launch partner for Agrani Satellite. Alcatel Space Industries is the industrial partner and vendor for the first satellite on the basis of an in-orbit delivery deal.