Idbi May Take Stake In Punjab Phone Operator

The Industrial Development Bank of India may pick up equity in ECL Telecommunication Ltd, formerly known as Essar Commvision Ltd. This is for the first time that an FI is taking equity in a basic telephone service operator.

ECL, promoted by the Nahatas of Himachal Futuristic Communication Ltd (HFCL), had acquired the Punjab circle from the Ruias of the Essar group last year.

HFCL chairman Vinay Malloo said, "As of now, the company has not received any proposal from IDBI."

But IDBI, while sanctioning Rs 656 crore to the basic service provider, said it might consider acquiring a part of the equity, since it perceived investments in the telecom sector as attractive.

The IDBI sanction letter said the institution would finally have an exposure of Rs 400 crore after parcelling out a Rs 156 crore loan to banks and other financial institutions.

However, the financial institution would decide on the quantum of equity once the project attains financial closure, top institutional sources said.

IDBI has taken the lead in telecom financing, with major exposures in Bharti Telcom, BPL Mobile and Tata Telecom.

The loan carries the medium- term lending rate of 12 per cent a year and has been extended for setting up facilities in the Punjab circle.

While HFCL picked up 80 per cent in ECL for Rs 200 crore, the remaining 20 per cent is held by the Essar group and the US-based Bell Atantlic.