Paging Firms Out To Recast Equity

Top paging companies, which have accumulated huge losses, are gearing up for equity restructuring exercises aimed at bringing in new partners and investment from the West, especially the US.

The focus towards the West follows the decision of the Korean and Thailand companies, which have substantial stakes in paging, and cannot sustain further operational losses.

Some of the Korean majors have been sending feelers to dilute their holdings.

Recently in a presentation before the Telecom Regulatory Authority of India, paging companies presented their status, including the position of accumulated losses.

The top paging company in the country, DSS Mobile Communications, revealed accumulated losses to the tune of Rs 200 crore, while Himachal Futuristic Communications Ltd (HFCL)-promoted Microwave Communications Ltd (MCL) had losses to the tune of Rs 102 crore. Losses of YK Modi-promoted Modi Korea Telecom Ltd (MKTL) stood at around Rs 30 crore.

 

In order to rope in new investors, most paging companies are in a rush to expand their subscriber base by doling out freebies and make their balance sheets look attractive. DSS, which has appointed Rothschild to find suitors, is likely to show the pagers of its subscribers as rentals to reduce asset liabilities. Others are also engaged in similar schemes to boost their image.

Korean majors like Samsung, Sunkyong, Seoul Mobile, and Shinawatra of Thailand have stakes in India which they plan to dilute or divest.

Earlier, MCL had to scrap its Rs 75-crore investment plan following foreign promoter Shinawatra International's decision not to sell its 40 per stake in favour of US firm PortaCom Wireless.

MCL is reworking its entire future projects and plans which include setting up networks in Uttar Pradesh (east), Bihar and Orissa. For this, MCL will have to mop up at least Rs 35 crore.

Modi Korea Telecom LtdL, which provides paging services under brand name Modi Page, is also mooting equity restructuring.

Korean outfits, Seoul Mobile Telecom and Samsung jointly hold 40 and 9 per cent stake, respectively, in MKTL and their earlier decision to pump in Rs 15 crore each is now uncertain.