Tata Tele plans rights to raise Rs 800 crore

Tata Teleservices (Maharashtra) is now planning a rights issue to raise close to Rs 800 crore.

This issue will be announced at an appropriate time, according to a senior executive of TTML. The company has already raised one third of its fund requirement of the current financial year by way of $125 million (Rs 600 crore) foreign currency convertible bonds (FCCB) in June 2004.

The remaining funds will be raised from its existing lender groups, the executive added. The company plans to use the funds for network expansion in Mumbai and Maharashtra and Goa circle.

The company is planning to launch its push-to-talk service in Mumbai shortly. Addressing shareholders at the company's 9th annual general meeting here today, Firdose A Vandrevala, chairman of TTML said the company is expanding its CDMA wireless network and will provide services in over 150 towns and cities with presence in every district in Maharashtra and Goa by the end of this year.

Currently, the company is operating in 20 towns. Vandrevala also pointed out that "the company will provide all-India roaming by the end of this financial year when Tata Teleservices commences services in major cities and towns in 12 more circles progressively from November 2004. International roaming would also be provided in the later part of the current financial year." The company's revenues for the quarter ended June 2004 stood at Rs 195.58 crore.

The loss for the quarter stood at Rs 98.93 crore mainly on account of an increase of Rs 7.48 crore in depreciation and an increase of Rs 4.62 crore in finance costs, due to capital expenditure incurred on expansion of CDMA wireless business, Vandrevala said. TTML has notched up significant market share in the fixed wireless phone (FWP) segment.

Vandrevala claimed that the company cornered 65 per cent of the market growth in FWP segment in July this year. A shareholder of the Tata Teleservices (Maharashtra) called for a poll on five resolutions.

Though the results of the poll are a foregone conculsions with Tatas holding over 70 per cent stake in the company, the shareholder pressed for the poll.

The resolutions for which the poll has been called for are as follows - Resolution 1 - for passing audited balance sheet, profit and loss, directors and auditors report, Resolution 2 pertains to reappointing Deloitte Haskins & Sells as auditors of the company, Resolution 4 pertains to reappointment of Kishore Chaukar as director of the company, Resolution 7 deals with employee stock option and resolution 8 takes into consideration increasing the borrowing limits by the board from Rs 3,000 crore to Rs 4,000 crore. The result of the poll will be announced on Wednesday, August 11.