IFC may fund Idea's $2.5 bn expansion

Lender's board meets on Mar 20 to take final call.

Idea Cellular, the GSM mobile service provider owned by the Aditya Birla Group, is planning to raise $250 million debt to fund expansion plans.

The debt is being raised as part of its $2.5 billion expansion plan over the next two years, including starting of operations in 9 more circles in the country.

According to the company's officials, it is in advanced stages of negotiations with a clutch of global financial institutions to raise syndicated debt.

Industry sources said the International Finance Corporation (IFC) was one of the major finance providers for the telecom company. IFC, the private sector funding arm of the World Bank, plans to provide loans in two tranches.

According to agency reports, the IFC board will meet on March 20 to consider two loans totalling $250 million to fund Idea Cellular's expansion plans.

The remaining would be raised through various syndicates and the company was in advanced stages of discussion with them.

At present, Idea has operations in 11 telecom circles and intends to launch services in Mumbai and Bihar on receipt of spectrum. The company has also licences for rolling out national long distance services shortly.

The company has a market share of around 9 per cent and has over 21 million subscribers, making it the fifth largest mobile operator in India.

While various subsidiaries of the Aditya Birla Group cumulatives own 57.7 per cent in Idea Celluar, Providence Equity Partners and Citigroup Global own 12.5 per cent and 5.2 per cent, respectively.

The remaining 24.6 per cent is held by the public. The company has received letters of intent to commence operations in 9 pending circles and is awaiting allocation of spectrum.