Ifci Sanctions Rs 132cr To Evergrowth Telecom

The Industrial Finance Corporation of India (IFCI) has sanctioned a loan of Rs 132 crore to Evergrowth Telecom Ltd (EGTL), the cellular operator in Punjab.

Sources said the IFCI loan is conditional and will be disbursed only after settlement of a legal dispute on ownership of 20 per cent stake in JT Mobiles, the parent company of EGTL.

The loan carries an interest rate of about 3.5 above the prime lending rate. Two promoters Parasrampuria Credit and Investments Ltd (PCIL) and RK Associates are battling in courts the ownership of 20 per cent equity in JT Mobiles. Industrial Development Bank of India (IDBI) has also reportedly put on hold a Rs 1,000 crore loan to JT Mobiles to finance its cellular networks in Karnataka and Andhra Pradesh.

The department of telecommunications (DoT) had surprised the market, on the eve of elections, when it allowed EGTL to be spun off as a separate company from its parent J T Mobiles.

The plan was under hold until then following the ownership dispute of J T Mobiles between R K Associates and PCIL.

JT Mobiles was awarded cellular licenses in Andhra Pradesh, Karnataka and Punjab in early-1996. It is a joint venture between Sanmar Electronics (20 per cent equity), PCIL or RK Associates (the disputed 20 per cent), United Telecom 11 per cent, Telia AB of Sweden 26 per cent, Bangkok-based Jasmine Telecom 13 per cent and Telecom Authority of Thailand 10 per cent. Sources added that the Essar group has evinced interest in picking up 76 per cent in EGTL.

However, after the proposal to pick up equity was struck down by DoT, Essar Telecom picked up Rs 98-crore worth convertible debentures issued by EGTL. JT Mobiles, has given an undertaking that the conversion of the debentures into equity will be only with the permission of DoT, but Essar Telecom is yet to agree.