Foreign Equity Hike In 3 Telecom Firms

The Cabinet Committee on Foreign Investment (CCFI) has approved a additional foreign equity of over Rs 700 crore in three telecom joint ventures "" Reliance Telecom, Modicom Network and Hughes Ispat.

In the case of Reliance and its partner Nynex International, the Committee allowed foreign equity of Rs 441 crore ($ 126 million).

Of this, $ 26.2 million, being 10 per cent of the total equity of the company, will be subscribed by Nynex International while the rest will be placed with foreign institutional investors and foreign financial institutions.

The joint venture, called Reliance Telecom Private Ltd, has obtained licences to set up cellular networks in Assam, Bihar, Himachal, Madhya Pradesh, North East, Orissa and West Bengal. The total capital outlay is Rs 1,836 crore for all the seven circles.

 

Modicom Network Private Ltd, a joint venture between the B K Modi group, Motorola and Distacom Communications, has been allowed to hike foreign equity from Rs 49 crore to Rs 171.5 crore. The paid up capital has gone up from Rs 100 crore to Rs 350 crore but the percentage of foreign equity will remain the same as before at 49 per cent.

The company had won two circles "" Punjab and Karnataka "" to operate cellular services in partnership with the US company, Vanguard. However, after prolonged negotiations, Vanguard dropped out in favour of Motorola and Distacom.

Hughes-Ispat, the cellular licencee for Maharashtra, has been allowed to hike foreign equity from Rs 800 crore to Rs 980 crore. The joint venture, between the Indian Ispat group, Hughes electronics and Alcatel, had won the licence as far back as November 1995. The hiked foreign equity will take the share of the foreign partners from 40 to 49 per cent.