Vodafone Raises Debt for Indian Expansion

Vodafone Essar, the company's Indian subsidiary is reported to have sucessfully raised around Rs 10,000 crore (US$2 billion) in a 5-year debt financing for network expansion and the forthcoming 3G license auction. The loan was arranged by the State Bank of India Capital Markets.

"We will use the loan for various business purposes," a spokesperson of Vodafone Essar told the Press Trust of India. Sources said the loan, which was raised last month, will be used for network rollout, broadband and wireless operations and some of it would be reserved for 3G spectrum auction.

The current reserve price for the 3G auction is US$412 million to cover all the available circles - although the auction has been delayed as the Finance Ministry is battling to double the reserve to at least US$824 million.

Vodafone is still facing a potential US$2 billion tax bill from the government following its purchase of the 67% stake in the firm from Hutchison Telecom - although it is appealing the decision of the Mumbai High Court that the tax bill should be paid.

On the web: The Economic Times

Posted to the site on 19th April 2009