BHARTI BORROWS $354M TO RETIRE EARLIER DEBT

Telecom major Bharti has tied up $354m in international funding. While $254m was raised from Swedish export credit agency EKN, FinnFund of Finland has extended a $100m loan.

ABN Amro was the lead arranger for these facilities. The funding is claimed to have come at a very low interest rate at a total cost of 4.4%, and will be used to retire the company's earlier debt, according to the company.

"This funding, at very attractive costs, is not only a significant vote of confidence in Bharti's capabilities and strong management team but is testimony to the true potential of the Indian telecom market. The Indian telecom sector is witnessing unprecedented and explosive growth.

Bharti is fully equipped with all key resources in place to capitalise on these impending growth opportunities in the telecom sector," says Akhil Gupta, joint managing director, Bharti Tele-Ventures.

These funds would be deployed for further expanding Bharti's mobile service networks and for new circle rollouts. Bharti currently provides mobile services in 20 circles under the brand name Airtel and is set to complete its all-India footprint in the near future.

The $254m loan from EKN will be used for making payments to Ericsson for the supply of capital equipment and the $100m FinnFund will be used to pay Nokia for the supply of capital equipment.

The funding has been arranged at an approximate spread of 35 basis points over the London Interbank Offered Rate (Libor), the company said, adding the total cost of funding is about 4.4% as on date, without currency hedge. This long-term funding has an average tenure of over five years.

Bharti is one of India's largest private sector provider of telecom services with about 10.63m customers as of December '04, comprising about 9.83m mobile customers. The company today offers mobile services in 20 out of 23 circles in India. The company also provides fixed-line services and internet access over DSL in five circles.

The company complements its mobile and fixed-line services with national and international long-distance services and has a cable landing station at Chennai, for the submarine cable connecting Chennai and Singapore.

The company provides reliable end-to-end data and enterprise services to corporate customers by leveraging its nation-wide fibre optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through gateways and landing stations.