MIRA INFORM REPORT
|
Report Date : |
17.11.2006 |
IDENTIFICATION DETAILS
|
Name : |
HUCHISON ESSAR CELLULAR
LIMITED |
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|
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Formerly Name: |
BPL MOBILE CELLULAR LIMITED |
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Country : |
India |
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Financials (as on) : |
31.03.2004 |
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Registered Office : |
1045/46, Avinashi Road,
Coimbatore - 641018, Tamilnadu, India |
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Date of Incorporation : |
30.03.1995 |
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Com. Reg. No.: |
18-7674 |
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CIN No.: [Company Identification No.] |
U64202TZ1995PLC007674 |
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TAN No.: [Tax Deduction & Collection Account No.] |
PNEB01584C |
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PAN No.: [Permanent Account No.] |
AAACB8614L |
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Legal Form : |
Closely held public limited liability company |
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Line of Business : |
Providing Mobile
Communication Service |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Unfavourable &
favourable factors carry similar weight in credit consideration. Capability
to overcome financial difficulties seems comparatively below average/normal. |
Small |
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Maximum Credit Limit : |
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Status : |
Moderate |
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Payment Behaviour : |
Slow by + 15/30 days |
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Litigation : |
Clear |
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Comments : |
Subject is a leading mobile
service providers in the country. It is a part of BPL Group, a medium sized
industrial house. The company has huge
accumulated losses. In a fierce market conditions, the company has not been
doing well. Trade relations are fair. Payments are reported as slow by +15/30
days. The
company’s controlling interest has been taken over by Essar Group, recently. |
LOCATIONS
|
Registered Office : |
1045/46, Avinashi Road,
Coimbatore - 641018, Tamilnadu, India |
|
Tel. No.: |
91-422-2213005/213252 |
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Fax No.: |
91-422-2201388 |
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E-Mail : |
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Website : |
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Hutch Centre |
Hutch Centre, |
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Branches : |
Pune
Nagpur
Aurangabad
Solapur
Kolhapur
Goa
Nasik
Vasai
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DIRECTORS
|
Name : |
Mr. K. S. Jaynthkumar |
|
Designation : |
Managing
Director |
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|
Name : |
Mr. M. K. Narayanan |
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Designation : |
Director
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Name : |
Mr. Thomas Pardun |
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Designation : |
Director
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|
Name : |
Mr. Jerry Leroy Wolfer |
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Designation : |
Director |
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|
Name : |
Mr. Richard Hegstrom |
|
Designation : |
Director
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Name : |
Mr. T C Chauhan |
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Designation : |
Director |
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Name : |
Mr. Douglas Holmes |
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Designation : |
Director |
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|
Name : |
Mr. Ajit G Nambiar |
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Designation : |
Director |
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Name : |
Mr. Vince Tallent |
|
Designation : |
Director
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Name : |
Mr.
S W Katwardhan |
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Designation : |
Director
|
|
Address : |
72,
Jolly Marker Apartment No. 2, HA Cuffe Paradc, Mumbai – 400006 |
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Date of Birth/Age : |
14.05.1947 |
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Date of Appointment : |
10.01.2002 |
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|
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|
Name : |
Mr.
Vijay Chandok |
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Designation : |
Director
|
|
Address : |
801,
ICICI Apartment, Near Kirti College, Dadar (West), Mumbai – 400028 |
|
Date of Birth/Age : |
20.02.1988 |
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Date of Appointment : |
25.08.2003 |
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|
Name : |
Mr.
K Jayabharat Reddy |
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Designation : |
Director
|
|
Address : |
501,
ICICI Apartment, Near Kirti College, Dadar (West), Mumbai – 400028 |
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Date of Birth/Age : |
12.04.1931 |
|
Date of Appointment : |
26.03.2004 |
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|
Name : |
Mr.
Krank John Sixi |
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Designation : |
Director
|
|
Address : |
Flat,
Knichis Bridge Court No. 28, BarerRoad, Hong Kong |
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Date of Birth/Age : |
20.11.1961 |
|
Date of Appointment : |
19.12.2005 |
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|
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|
Name : |
Mr.
LUI Dennie |
|
Designation : |
Director
|
|
Address : |
Duplex
– 5, Dynasty Villa – 8, Dyna Sty Heights, Reacon Hill, Kowioon, Hong
Kong |
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Date of Birth/Age : |
11.01.1958 |
|
Date of Appointment : |
19.12.2000 |
|
|
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|
Name : |
Mr.
Sunil Hanka |
|
Designation : |
Director
|
|
Address : |
B
– 103, Marv Villa, Gajanand Colony Road, Jawahah Nagar, Gurgaon Nagar, Mumbai
– 400062 |
|
Date of Birth/Age : |
26.06.1962 |
|
Date of Appointment : |
19.12.2005 |
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|
Name : |
Mr.
Asim Ghosh |
|
Designation : |
Director
|
|
Address : |
H
– 1, NCPA Apartment, Nariman Point, Mumbai – 400021 |
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Date of Birth/Age : |
07.12.1947 |
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Date of Appointment : |
19.12.2005 |
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|
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|
Name : |
Mr.
Roll John Chhistophcr |
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Designation : |
Director
|
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Address : |
2810
Floor, Suraj Apartment, Opposite Amehican Consulaf Bhulabhai Desai Road,
Mumbai – 400026 |
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Date of Birth/Age : |
16.08.1956 |
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Date of Appointment : |
19.12.2006 |
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|
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|
Name : |
Mr.
Partha Dev |
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Designation : |
Director
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|
Address : |
Flat
No. 32, Venus Plot No. 6, Mhada Layout, SVP Nagar, Near Versova Tel Erxchang,
Andheri (West), Mumbai – 400053 |
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Date of Birth/Age : |
08.03.1971 |
|
Date of Appointment : |
21.12.2005 |
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|
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|
Name : |
Mr.
Ruia Anshuman |
|
Designation : |
Director
|
|
Address : |
67
A, Walkeshwar Road, Opposite Birla School, Mumbai – 400006 |
|
Date of Birth/Age : |
11.03.1971 |
|
Date of Appointment : |
21.09.2005 |
|
|
|
|
Name : |
Mr.
Rajani Gul Prem |
|
Designation : |
Director
|
|
Address : |
11
Palekak Chambers, 4th Floor, Dhobi, Mumbai – 400002 |
|
Date of Birth/Age : |
30.01.1967 |
|
Date of Appointment : |
21.07.2005 |
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|
|
|
Name : |
Mr.
Saraf Vikash |
|
Designation : |
Director
|
|
Address : |
2B,
Sakeh Apartment, 71 Pochkhanawaia Road, Worli, Mumbai - 400002 |
|
Date of Birth/Age : |
20.05.1958 |
|
Date of Appointment : |
21.07.2005 |
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|
|
|
Name : |
Mr.
Ganesan Sambasivan |
|
Designation : |
Director
|
|
Address : |
Subhadra
No. 11th Floor, N S Road, JVDP Scheme, Mumbai – 400049 |
|
Date of Birth/Age : |
28.04.1967 |
|
Date of Appointment : |
12.06.1999 |
MAJOR SHAREHOLDERS
|
Names of Shareholders |
No. of Shares |
|
Mr. Asim Ghosh |
50 |
|
Mr. Sandip Das |
25 |
|
Mr. Christophfr John Foll |
6 |
|
Mr. Groffrfy Carolan |
1 |
|
Mr. Sunil Ranka |
1 |
|
Mr. K Sankara Narayanan |
1 |
|
M/s. Hutchison Essar Limited |
1 |
|
Mr. Ramanathan Kumar |
5 |
|
Ms. Kannan Sriraman |
1 |
|
Mr. J Raghuram |
5 |
|
Industrial Development Bank
of India |
3 |
|
Infrastructure Development
Finance Company Limited |
1 |
BUSINESS DETAILS
|
Line of Business : |
Providing Mobile
Communication Service |
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|
|
|
Services : |
|
GENERAL INFORMATION
|
Bankers : |
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Facilities : |
-- |
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Banking Relations : |
Satisfactory |
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|
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|
Auditors : |
A F. Fergusons Limited Chartered Accountants 3rd
Floor, Mahatma Gandhi Road, Bangalore - 560001, Karnataka |
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|
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Associates: |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
250000000 |
Equity
Shares |
Rs.100/- each |
Rs. 25000.000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
126197956 |
Equity
Shares |
Rs.100/- each |
Rs. 12619.796 millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF
FUNDS |
31.12.2005 |
31.03.2005 |
31.03.2004 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
12619.796 |
12619.796 |
12619.795 |
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
3] Reserves & Surplus |
0.000 |
0.000 |
0.000 |
|
4) (Accumulated Loss) |
(23650.974) |
(20705.301) |
(19818.934) |
|
NET WORTH |
(11031.178) |
(8085.505) |
(7199.139) |
|
|
|
|
|
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
18857.782 |
18168.328 |
17229.946 |
|
2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
|
TOTAL
BORROWING |
18857.782 |
18168.328 |
17229.946 |
|
|
|
|
|
|
Zero interest fully convertible debentures |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
TOTAL
|
7826.604 |
10082.823 |
10030.807 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
6604.955 |
6887.693 |
6507.522 |
|
Capital work-in-progress |
1582.365 |
798.724 |
723.286 |
|
|
|
|
|
|
INVESTMENTS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
17.949 |
22.359 |
21.562 |
|
Sundry Debtors |
569.776 |
757.371 |
592.065 |
|
Cash & Bank Balances |
232.019 |
182.976 |
297.899 |
|
Other Current Assets |
0.000 |
0.000 |
0.000 |
|
Loans & Advances |
945.437 |
1114.548 |
1000.941 |
|
Total
Current Assets |
1765.181 |
2077.254 |
1912.467 |
|
Less : |
|
|
|
|
Current Liabilities |
5433.607 |
3394.329 |
3174.277 |
Provisions
|
43.532 |
20.893 |
16.543 |
Total Current Liabilities
|
5477.139 |
3415.222 |
3190.820 |
|
Net
Current Assets |
(3711.958) |
(1337.968) |
1278.353 |
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
3351.242 |
3734.374 |
4078.352 |
|
|
|
|
|
TOTAL
|
7826.604 |
10082.823 |
10030.807 |
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.12.2005 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
3966.985 |
4862.387 |
3647.061 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
(2945.674) |
(886.366) |
(2358.139) |
Provision for Taxation
|
0.000 |
0.000 |
0.000 |
Profit/(Loss) After Tax
|
(2945.674) |
(886.366) |
(2358.139) |
|
|
|
|
|
Export Value
|
NA |
NA |
189.974 |
|
|
|
|
|
Import Value
|
NA |
NA |
565.624 |
|
|
|
|
|
Total Expenditure
|
6912.659 |
5748.753 |
2906.027 |
KEY RATIOS
|
PARTICULARS |
|
31.12.2005 |
31.03.2005 |
31.03.2004 |
PAT / Total Income
|
(%)
|
(74.25)
|
(18.22) |
(64.65) |
|
|
|
|
|
|
Net Profit Margin
(PBT/Sales) |
(%) |
(74.25)
|
(18.22) |
(64.65) |
|
|
|
|
|
|
Return on Total Assets
(PBT/Total Assets} |
(%) |
(35.19)
|
(9.88) |
(28.00) |
|
|
|
|
|
|
Return on Investment (ROI)
(PBT/Networth) |
|
(0.26)
|
(0.10) |
(0.32) |
|
|
|
|
|
|
Debt Equity Ratio
(Total Liability/Networth) |
|
(2.20)
|
(2.66) |
(2.83) |
|
|
|
|
|
|
Current Ratio
(Current Asset/Current
Liability) |
|
0.32
|
0.60 |
0.59 |
LOCAL AGENCY FURTHER INFORMATION
History
Subject
was originally incorporated under the name and style of "US West India
Cellular Telecommunications Services Private Limited". The name of the
company was changed to "BPL Cellular Limited" and again the name of
the company was changed to the present.
The
company carry on in India and abroad all or any of the business of operators,
producers, suppliers, installers, distributors, network operators, converters,
transmitters, conductors, developers, testers, importers, exporters, dealers
and to manage, replace, establish, register, maintain, protect, extend work,
improve, repair, transfer, shift, administer basic and or cellular mobile
telephone systems and services, including but no limited to switched voice
telephony through fixed network for making dialled local calls, dialled and
operator assisted national and international calls, supplementary and non
supplementary services and switching facilities, support service including
fault reporting and repair services, including booking, enquiry assistance,
STD/ISD code enquiring services, telephone billing access to emergency and
public utility services, coin operated and attended public booth for general
public, technical facilities for tracing obnoxious calls, facility of manual
hold on emergency services, interception facilities.
The
company operates wireless services, value added services, electronic mail,
voice mail, very small aperture terminals, audiotech services, direct access
code dialling, bulletins board services, videotech services, video
conferencing, morning alarm services and other telephone communication system.
The
company carry on in India and elsewhere, process, supply, distribute,
wholesell, retain, agents, showroom owners, convert, develop, store
instruments, equipments, systems machinery, telephone exchanges, appliances,
apparatus, transmitting systems, switching systems, wireless apparatus,
interfaces, interconnection systems.
The
company is a joint venture between BPL Mobile and AT & T Wireless offering
GSM wireless under the brand name of "BPL Mobile" since, 1996 in the
circles of Maharashtra, Goa, Tamilnadu, Kerala and Pondicherry.
The
company is one of the largest non-recourse debt-financing project in the Indian
Telecom Industry, the total project cost is valued at Rs. 32480.00 millions.
The project is funded by an equity component of Rs. 14890.00 millions from the
promoters BPL Communications and AT & T Wireless and the balance by
long-term debt of Rs. 17590.00 millions. One of the pioneers in the Indian
Telecom Sector, the company had set up the largest green field project in India
at the time of opening of the sector.
The
company is achieving its closure in plans to touch the 1 million subscriber
base mark in the current financial year and ramp up to 1.400 millions
subscribers by the end of the next financial year. By March, 2004 the company
expects to generate Rs. 5000.00 millions as revenue with an operating profit of
Rs. 1500.00 millions. Towards this the company is making significant
investments on the Network Front by increasing its high capacity microwave
backbone. Its infrastructure includes 5 MSCs, 30 Base Station Centre (BSC) and
600 cell sites.
Press
Releases
Redefining
the entry barrier in the pre-paid category, subject, India’s nest mobile phone
service provider announced the introduction of new mots prepaid card at Rs. 99
for its subscribers in Maharashtra and Goa. With the introduction of the new
price, it has also taken the lead in introducing a new value added service –SMS
Buddy for netmots (prepaid) subscriber. The ‘SMS Buddy’ Service will allow mots
users to send unlimited messages to two numbers of their choice at just Rs. 25
per month. As a specail introductory offer, new consumers going mobile with
newmots before 31st March 2004 can enjoy the service free for the
first two months.
The
new service will clearly differentiate mots from other prepaid options in the
marketplace, as it is unique and only available to the mots (prepaid) users in
Maharashtra and Goa. Newmots users can subscribe to the SMS Buddy service by
calling 567 and nominating the two numbers of their choice. Initially, users
can only nominate local BPL mobile numbers as their buddy. Besides this
service, mots users can enjoy the other value added services like send-a-song,
Group SMS, Family and Friends and Night Calling.
Strategically,
the pre-paid category has always been a focus area. Besides redefining the
entry barrier in the prepaid category with a newmots card at Rs. 99, they have
also taken the lead in enhancing the value proposition with new features and
services. This will help increasing the brand edge in the pre-paid category and
contribute additional revenue from the prepaid user.
Subject
is India’s best mobile service in the latest nationwide survey conducted by
International Data Corporation across GSM and CDMA service providers. Another
recent report by AC Neilsen-ORG Marg published in The economic Times Brand
Equity has also rated subject among the top admired and trusted telecom brands
in the country.
Today,
over 1.5 million subscribers across 209 cities, in the markets of Mumbai,
Maharashtra, Kerala, Tamilnadu, Pondicherry and Goa enjoy India’s best service
through world class technology and services and a network that gives Superior
coverage and Amazing Clarity. It has revolutionized the mobile communications
industry in India with its state-of-art technology, which includes the unique
network design-the Qualnet, Camel Phase 2 Intelligent Network platform and GPRS
providing cutting edge services like Multimedia Messaging, mobile browsing,
Java based mobile games amongst others.
Wiz 32 K
Sim
Subject’s
new WIZ 32K SIM card is a powerful SIM card uploaded with a new generation
technology that can place a world of instant information at customers
fingertips.
With
4 times as much memory as conventional SIMs, the WIZ 32K Sim card will show you
what a true wirefree experience is all about.
It provides :
Ø
Enhanced phonebook
memory to store extra phone numbers
Ø
Increased SMS storage
capacity to store more incoming messages
Ø
A host of value added
services just a click away
Form 8 Particular for creation or modification of
charges
|
Corporation
identity number or foreign company registrations number of the company |
L64202TZ1995PLC007674 |
|
Name
of the company |
BPL MOBILE CELLULAR LIMITED |
|
Address |
1045/46, Avinashi Road,
Coimbatore - 641018, Tamilnadu, India |
|
This
Form is for |
Creation
Charge |
|
Particular
of the charge holder |
UTI
Bank Limited, Universal Insurance Building, P M Road, Fort, Mumbai –
400021 |
|
Name
or description of the instrument creating charge |
Deed
of hypothecation of machinery and other moveable assets |
|
Date
of the instrument creating charge |
27.02.2006 |
|
Amount
Secure by the charge |
Rs.
250.000 Millions |
|
The
principal trams and conditions |
Bank
Guarantee – Rs. 250.000 Millions Terms
and conditions and extant and operation Details
of charge Hypothecation
by way of first charge on movable fixed assets, more particularly decribed Hypothecation
by way of second pari passu charge on the movable |
|
Description
of the property charge whether it is a charge on |
Immovable,
Stock in trade, Book Debts and other |
|
Name
of the company |
HUCHISON ESSAR CELLULAR
LIMITED |
||||||||||||||||||||
|
Presented By |
-- |
||||||||||||||||||||
|
1)
Date and description of instrument creating the change |
Forign
letter of credit time to time trust loan agreement dated 11.09.1997 Deed
of hypothecation dated 07.10.1998 executed by the company in favour of global
trust bank limited |
||||||||||||||||||||
|
2)
Amount secured by the charge/amount owing on the securities of charge |
Rs.
10.000 millions (Letter of credit facility) Rs.
150.000 Millions (Demand loan Facility) |
||||||||||||||||||||
|
3)
Short particular of the property charged. If the property acquired is subject
to charge, date of the acquired of the property should be given |
Hypothecation
of goods, materials, imported to be imported under letter of credit All
receivables of the company |
||||||||||||||||||||
|
4)
Gist of the terms and conditions and extent and operation of the charge. |
The
loan will carry interest at the rate of 23.5% on outstanding from time to
time, margin being 25% hypothecation
goods to be kept/stored at borrowers risk and expenses in good condition
shall be fully Insured |
||||||||||||||||||||
|
5)
Name and Address and description of the person entitled to the charge. |
Global
Trust Bank Limited, M G Road Branch, Mahatma Gandhi Road, Bangalore – 560001 |
||||||||||||||||||||
|
6)
Date and brief description of
instrument modifying the charge |
Deed
of hypothecation dated 25.04.2003 by the company in favor of Global Trust
Bank Limited the facility Rs. 550.000 Millions and Rs. 700.000 Millions is
enclosed |
||||||||||||||||||||
|
7)
Particulars of modifications specifying the terms and conditions or the
extent of operations of the charge in which modification is made and the
details of the modification. |
The
charge on the present and future receivable and goods and materials and to be
purchased under; Latter of credit in facour Global Trust Bank Limited the
facility Rs. 150.000 Millions and Rs. 550.000 Millions is enclosed
Rate
of Interest – CC, WCDL, PLR + 1% and 15% with periodical rests and at such
rate at such rates as may be specified by the bank from time to time Penal
Interest – 2% Margin
– 10% Tenure
– 12 months |
AS PER WEBSITE
BPL
Mobile is committed to business leadership in providing world class technology
services and solutions, by focusing on People, Customers,
Technology, and passionately driving Excellence through out the
organization thereby creating Value.
Having
started its services in 1995, BPL Mobile operates in Mumbai, Maharashtra, Goa,
Kerala, Tamil Nadu and Pondicherry - with a network spanning across 209 cities
currently.
Today, BPL Mobile, India's premier mobile phone service provider
serves over 2.5 million happy and satisfied subscribers across all our markets
This achievement is a result of BPL Mobile's philosophy to give the consumer a
truly world class wirefree experience through technology, services and a
network that gives Superior Coverage and Amazing Clarity. BPL Mobile has
revolutionized the mobile communications industry in India with its state of
the art technology, which includes the unique network design, the Qualnet,
Camel Phase 2 Intelligent Network (IN) platform and GPRS providing cutting edge
services like Multimedia Messaging (MMS), mobile browsing, Java based mobile
games amongst others.
Hutch-Essar buys BPL Comm for Rs 2,5000.000 Millions in all-cash
deal
TIMES NEWS NETWORK THURSDAY, JULY 21, 2005
BANGALORE:
BPL Mobile’s cellular assets are set to flow into the Hutch-Essar combine to
get the latter within knocking distance of market leader Airtel, with BPL
Mobile’s chairman & CEO Rajeev Chandrasekhar selling his 64% stake in BPL
Communications to Essar on Wednesday. The company will be merged into Hutch
Essar eventually. This is the biggest M&A in the telecom space in India.
ET
had first reported about these developments on March 22 (Essar seen in talks
with BPL Mobile for larger pie), May 19 (Essar, Hutch may team for BPL Mobile
bid), and July 20 (Essar & co set to aquire BPL Mobile, Cellular).
The
enterprise value of BPL’s mobile business has been put at over $1bn (Rs
4,4000.000 Millions). The business carries a debt of Rs 1,9000.000 Millions.
This means that Essar has acquired BPL Communications for around Rs 2,5000.000
Millions net of debt. Apart from stating that it was an all-cash deal, Mr
Chandrasekhar declined to talk about pricing.
By
the above calculations, Mr Chandrasekhar and his associates have got about Rs
1,6000.000 Millions for their 64% block. He said that Essar is in the process
of buying out the remaining shareholders, including the 7.3% held by his
father-in-law TPG Nambiar.
The
balance is held by ICICI and others (8.3%) and foreign investors (20.4%). Essar
will negotiate directly with these investors to buy them out. Sources said
Essar is following a differential pricing strategy in acquiring stakes from
other investors. But if Mr Nambiar gets the same valuation as his son-in-law,
then he should walk away with Rs 1820.000 Millions
Vishal
N Kampani of JM Morgan Stanley — which was the advisor for Mr Chandrasekhar —
said that in deals like these, “controlling premium is paid for large blocks.”
However,
there is some confusion over the amount of debt BPL Mobile carries. While Mr
Chandrasekhar today said it was Rs 1,9000.000 Millions, sources within
financial circles told ET that it is higher, in the range of Rs 2,2000.000
Millions-2,3000.000 Millions . If the debt is indeed higher, then the monies
paid out by Essar will be commensurately lower. BPL officials, however, said
that with the business undergoing a debt restructuring last year, the figure
had come down to Rs 1,9000.000 Millions.
It
is unclear how Essar will fund this acquisition. Also, there is no
‘non-compete’ clause between the two. BPL Communications is the holding company
for two firms: BPL Mobile Communications (which operates in the coveted Mumbai
circle) and BPL Mobile Cellular (with interests in Maharashtra, Goa, Kerala, Tamil
Nadu and Pondicherry).
The
holding company has 74% stake in BPL Mobile, with Essar Teleholdings owning
9.9% and Asia Pacific Holdings (a hedge fund) holding the balance 16.1%. Essar
will also buy out the hedge fund. BPL Mobile Cellular is owned entirely by the
holding company.
The
anticipated legal hurdle over a company not being allowed to hold more than 10%
stake in more than one operating company in a circle is being circumvented,
with BPL and Essar going for intra-circle mergers. “This will be fully
compliant with all regulations,” Mr Chandrasekhar said. Intra-circle mergers
are allowed when certain guidelines (on the number of players in the circles,
number of subscribers etc) are met, he added.
Commenting
on the process, Mr Chandrasekhar said, “We had multiple options including
strong interest from foreign players. We decided to go with Essar in the last
24 hours.” Mr Chandrasekhar, who stepped down as chairman & CEO of the
company, effective today, said the decision to sell to Essar was “part deal and
part emotional.
”
He said Hutch-Essar “offered the best fit as in three out of four markets that
BPL operates in, Essar is not present.” He added that keeping the interest of
his 1,000-odd employees, “of whom, over 50% have been with us for more than 5-6
years,” was another consideration that made him plumb for Essar. “A strong
foreign partner is critical for this business, and in Hutch you have one,” he
added.
Mr
Kampani said that till the last leg, two foreign players were still in
contention — an European company and a Russian operator. Over the past few
months, the names of companies like Vodafone, Orascom (Egypt), Alfa Telecom,
Systema of Russia and Deutsche Telekom had been doing the rounds as potential
buyers of BPL Mobile.
Mr
Chandrasekhar said that this deal will trigger the second round of
consolidation in the domestic cellular market and at the same time, will raise
the entry barrier for foreign players who have so far had no presence here. The
merged entity with 11m subscribers (8m from Hutch-Essar and 2.8m from BPL) will
be within nipping distance of Airtel and Reliance.
Mr
Chandrasekhar said that his decision to sell was “not an easy one to make. In
’01 (BPL’s failed bid to merge with Idea), I had stepped back. That was an
easier call than today.” He said the compelling argument was the long-term view
of what was good for the company, which needed a strong strategic foreign
partner. He also said that with all his capital locked in this company,
unlocking it gives him the resources to do things that interest him. Mr
Chandrasekhar will spell out his future plans in the coming weeks.
News
Courtesy : The Economic Times
Cellular News
Date: 21/7/2005
Essar buys out BPL Communications
Essar buys out
BPL Communications valued at Rs.4,4000.000 Millions. It is the biggest
acquisition in telecom sector in India so far. The business carries a debt of
Rs.19000.000 Millions. Mr. Rajeev Chandrashekhar sold his 64% stake in BPL
Communications to Essar in an all cash deal of about Rs.16000.000 Milions.
Essar is in the process of buying out other share holders including 7.3% stake
of Mr.TPG Nambiar. Balance 8.3% is held by ICICI & others and 20.4% by Foreign
investors. BPL Communications is the holding company of BPL Mobile which
operates in Mumbai and BPL Cellular which operates in Maharashtra & Goa,
Tamil Nadu & Pondicherry and Kerala. BPL has around 2.63 Millions
subscribers. The merged entity would become the third largest private service
provider in terms of subscribers after Bharti and Reliance.
Date: 5/7/2005
Essar
increases its stake in Hutch JV
Essar
Teleholding has bought an additional 3.43% stake held by Usha Martin Telemetics
in Hutchison - Essar for Rs.2670.000 Millions. The purchase follows an
agreement between Hutchison, Essar and Usha Martin Telematic where Essar had
the option to purchase 3.43% of Hutchison-Essar at the original acquisition
price for the Kolkata licence plus a carry cost till June 30, 2005, which it
has exercised. Usha Martin is owned jointly by Kotak and Hutchison. Post-buyout
Essar's stake in the joint venture has move up to 30.42%, valued at over
Rs.23679.600 Millions, while Hutch's stake has come down to
53.1%.
France Telecom exits BPL, Essar buys 9.9%
BS Corporate Bureau in Mumbai | December 04,
2004 11:32 IST
France Telecom (Orange SA) has exited BPL Mobile
Communications, the global systems for mobile services company in Mumbai.
The French company has sold its 16.1 per cent stake
in BPL Mobile Communications, to overseas investor Asia-Pacific Systems, and
the remaining 9.9 per cent stake to Essar Teleholdings, the telecom arm of the
Essar group. Both deals were done overseas for an undisclosed amount.
Although the financial details of the deal were not
available, an Essar group spokesperson confirmed the development.
France Telecom owns the 'Orange' brand.
The Essar group also has an interest in
Hutchison-Essar. The Essar group will have close to a 36 per cent stake in the
combined entity that is proposed to be formed after consolidating the equity in
the 10 circles operated by Hutchison Essar.
Essar Teleholding has merged its circles in eastern
UP, Haryana and Rajasthan with Hutchison Essar, and the process for merging the
entire operations is currently on, Essar sources said. Hutchison Essar has a
subscriber base in excess of seven million.
Sources close to the deal claim the Essar group is
looking at the deal as a financial investment. "Essar Teleholdings might
exit its holding in favour of the strategic partner in BPL Mobile," a BPL
Mobile source claimed.
In fact, the promoters of BPL have already hired
the services of investment bankers JM Morgan Stanley to look for a strategic
partner in all of its three telecom ventures -- BPL Communications, BPL Mobile
Communications and BPL Cellular.
TPG Nambiar and Rajeev Chandrasekhar, the BPL
promoters, together hold a 60 per cent stake in BPL Communications and the
remaining 40 per cent is held by foreign investors such as CDC, AIG, AIDEC and
TVG.
BPL Communications, in turn, holds a 74 per cent
equity in BPL Mobile Communications, which operates in the Mumbai circle. The
remaining 26 per cent was held by France Telecom.
BPL Communications holds 100 per cent of the equity
in BPL Cellular, which operates in the Maharashtra and Goa, Kerala and Tamil
Nadu circles. France Telecom has been a passive investor in BPL Mobile
Communications.
Faced with financial difficulties, France Telecom
recently exited from similar investments in Thailand and Indonesia and has
decided to focus only on the European market.
Essar Teleholdings acquires 3.43 pc
more in Hutchison for Rs 2670.000 Millions
Mumbai
, July 4
ESSAR Teleholdings' stake in Hutchison Essar has
risen to 30.42 per cent from 26.99 per cent, the company having acquired an
additional stake of 3.43 per cent in the latter for Rs 2670.000 Millions.
The acquisition, which was made on June 30, resulted
when Essar Teleholdings (ETHL) exercised its option to buy out Usha Martin
Telematics' stake in Hutchison Essar.
The purchase follows an agreement between Hutchison,
Essar and Usha Martin Telematics Ltd, wherein Essar had the option to purchase
3.43 per cent of Hutchison Essar at the original acquisition price for the
Kolkata licence plus a carry cost, said a news release from ETHL. Essar had an
option to acquire this stake until June 30.
Usha Martin Telematics is owned jointly by Kotak and
Hutchison.
Commenting on the transaction, Mr Vikash Saraf, CEO,
ETHL said, "This acquisition is part of our decision to enhance our stake
in the consolidated entity and also reflects the strong relationship between
Essar and Hutch."
ETHL also recently acquired a 9.9 per cent stake in
BPL Mobile in their Mumbai circle.
The transaction cost of Rs 2670.000 Millions for a
3.43 per cent stake works to a valuation of Rs 7,8000.000 Millions for the
Hutch-Essar group, taking the most simplistic approach, said an analyst. This
is not taking into account the fact that the promoters may not transact at the
objective valuation price of the company.
Market watchers say the transaction could be a
preparatory exercise in the run up to an initial public offering of the
Hutch-Essar group, which is expected some time this year.
ETHL is part of the Essar group and is a holding
company for the group's telecommunication investments.
CMT REPORT [Corruption, Money
laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION ON DESIGNATED PARTY
No exist designating subject or any of its
beneficial owners, controlling shareholders or senior officers as terrorist or
terrorist organization or whom notice had been received that all financial
transactions involving their assets have been blocked or convicted, found
guilty or against whom a judgement or order had been entered in a proceedings
for violating money-laundering, anti-corruption or bribery or international
economic or anti-terrorism sanction laws or whose assets were seized, blocked,
frozen or ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or
assets of the subject are derived from criminal conduct or a prohibited
transaction.
4] Record on Financial Crime :
Charges or conviction registered
against subject: None
5] Records on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal Records
No available information exist that suggest that
subject or any of its principals have been formally charged or convicted by a
competent governmental authority for any financial crime or under any formal
investigation by a competent government authority for any violation of
anti-corruption laws or international anti-money laundering laws or standard.
8] Affiliation with Government :
No record exists to suggest that any director or
indirect owners, controlling shareholders, director, officer or employee of the
company is a government official or a family member or close business associate
of a Government official.
9] Compensation Package :
Our market survey revealed that the amount of
compensation sought by the subject is fair and reasonable and comparable to
compensation paid to others for similar services.
10] Press Report :
No press reports /
filings exists on the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.86 |
|
UK
Pound |
1 |
Rs.84.97 |
|
Euro |
1 |
Rs.57.59 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
4 |
|
PAID-UP
CAPITAL |
1~10 |
5 |
|
OPERATING
SCALE |
1~10 |
4 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS
SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT
LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT
POINTS |
|
|
|
--BANK
CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER
ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT
POINTS |
|
|
|
--SOLE
DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT
ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
NO |
|
--OTHER
MERIT FACTORS |
YES/NO |
NO |
|
TOTAL |
|
37 |
This score serves as a reference to assess SC’s credit risk and to set
the amount of credit to be extended. It is calculated from a composite of
weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial condition (40%) Ownership background (20%) Payment record (10%)
Credit history (10%) Market trend (10%) Operational size
(10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses
an extremely sound financial base with the strongest capability for timely
payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses
adequate working capital. No caution needed for credit transaction. It has
above average (strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial
& operational base are regarded healthy. General unfavourable factors
will not cause fatal effect. Satisfactory capability for payment of interest
and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable
& favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse
factors are apparent. Repayment of interest and principal sums in default or
expected to be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute
credit risk exists. Caution needed to be exercised |
Credit not recommended |
|
NR |
In
view of the lack of information, we have no basis upon which to recommend
credit dealings |
No Rating |
|
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