VSNL to prepone investment in Tata Tele

Videsh Sanchar Nigam Ltd (VSNL) has decided to advance its schedule for equity investment of Rs 835.8 crore in Tata Teleservices (TTSL), a wholly owned subsidiary of the Tata group, to June 30, 2004, from the earlier proposed date in fiscal 2007-08 due to the drastic changes in the telecom policy which includes introduction of unified licence regime.

Speaking to Business Standard , SK Gupta, managing director of VSNL, said, "we have advanced our investment programme to be in line with the investment plan of TTSL which has in turn preponed/changed its investment plan due to external development like introduction of unified license regime."

Gupta said the company will continue to maintain its stake at 19.9 per cent in TTSL and not exceed it. It has invested Rs 465.4 crore in TTSL as on December 31, 2003, and the balance Rs 370.4 crore would be invested by June 30.

VSNL informed the stock exchange here today that in 2002, its board had approved a plan to take upto 19.99 per cent stake in TTSL, while the equity contribution was to be made over a seven-year period, it said.

According to earlier plan, VSNL was planning to disburse Rs 636.8 crore over the first four years, while the remaining would be offered on a basis of mutual understanding between TTSL and VSNL, it added.

The amount was split-up based on the business plan of TTSL, such that "subscriptions of VSNL at any stage does not exceed 19.9 per cent of the subscribed equity capital of TTSL", it said.

The company has informed the exchange that "as a result of the drastic changes in the telecom licensing regime, the business plan and capitalisation schedule of TTSL has been revised".

Due to changes in various government policies, particularly the introduction of unified access license, "it is considered necessary from the perspective of business and competitive scenario that TTSL opt for unified license in all its existing circles", it added.