Sterling Cellular Plans $175m Adr

The Ruias-controlled Sterling Cellular plans to tap the American depositary receipts (ADR) market with a $175-million (Rs 630 crore) issue. It has already received the finance ministrys approval for the offering.

The company has not yet finalised the lead managers to the issue, sources said. Union Bank of Switzerland holds the financial advisory mandate for Sterling Cellular and Essar Commvision, another Ruias-promoted company which holds the basic telecom letter of intent for Punjab.

The ADR issue will be the first after the BPL Cellular Holdings attempt to access the US market failed. The Mumbai cellular licensees offering had not done well because of the high premium the promoters wanted for the issue. Several other cellular companies like Hutchison Max of Mumbai, Delhis Bharti Cellular and the RPG ventures in Madras and Madhya Pradesh deferred plans to access the ADR market after the BPL fiasco.

 

Sterling Cellular is one of the licensees in Delhi, locked in a battle for the capitals cellular market with Bharti Cellular. Further, Sterling Cellular holds 80 per cent stake in Aircell Digilink, the cellular licensee in three circles Uttar Pradesh (East), Haryana and Rajasthan.

The company has massive investment plans and has been positioning itself as north Indias biggest network. Total investments in Delhi and the three circles will amount to about Rs 1,600 crore in the first five years. Senior executives of the company had projected an equity requirement of some $175 million (Rs 630 crore) to part-finance these investments. The Essar group also had plans to acquire the Punjab cellular licence from JT Mobile. It is not yet clear whether this project would be brought under the Sterling Cellular umbrella.