MIRA
INFORM REPORT
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Report Date : |
12.12.2007 |
IDENTIFICATION
DETAILS
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Name : |
VODAFONE ESSAR CELLULAR LIMITED |
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Formerly Known As : |
HUTCHISON ESSAR CELLULAR LIMITED |
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Registered Office : |
BPL Centre, 1045/46, Avinashi Road, Coimbatore - 641018, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.12.2006 |
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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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Legal Form : |
A Closely Held Public Limited Liability Company |
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Line of Business : |
Providing Mobile Communication Service |
RATING &
COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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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
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Registered Office : |
BPL Centre, 1045/46, Avinashi Road, Coimbatore - 641018, Tamilnadu, India |
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Tel. No.: |
91-422-2213005 / 2213252 |
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Fax No.: |
91-422-2201388 |
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E-Mail : |
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Website : |
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Corporate Office : |
FP No. 27, Survey No. 21, Old Pune – Mumbai Highway, Wakdewadi,
Shivaji Nagar, Pune – 411005, Maharashtra, India |
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Tel. No.: |
91-20-30116000 / 01 |
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Branches : |
Located at :
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DIRECTORS
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Name : |
Mr. Asim Ghosh |
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Designation : |
Director |
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Address : |
64, NCPA Apartments, Nariman Point, Mumbai – 400021, Maharashtra,
India |
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Date of Birth/Age : |
07.12.1947 |
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Date of Appointment : |
22.12.2006 |
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Name : |
Mr. Vikas Saraf |
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Designation : |
Director |
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Address : |
2B, Saker Apartments, 71, Pochkhanwala Road, Worli, Mumbai – 400025,
Maharashtra, India |
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Date of Birth/Age : |
18.12.1968 |
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Date of Appointment : |
25.06.2007 |
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Name : |
Mr. Sunil Ranka |
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Designation : |
Director |
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Address : |
B / 103, Mary Villa Building, Gajanan Colony Road, Jawahar Nagar,
Goregaon [West], Mumbai – 400062, Maharashtra, India |
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Date of Birth/Age : |
25.06.1962 |
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Date of Appointment : |
19.12.2005 |
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Name : |
Mr. Partha Dey |
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Designation : |
Director |
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Address : |
Flat No. 32, Venus, RDP – 2, Plot No. 6, Mhada Layout, SVP Nagar,
Andheri [West], Mumbai – 400053, Maharashtra, India |
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Date of Birth/Age : |
08.03.1971 |
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Date of Appointment : |
21.12.2005 |
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Name : |
Mr. Satish Patwardhan |
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Designation : |
Nominee Director |
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Address : |
A – 31, Rutuparna Apartments, 40/1, Kothrud, Near Kothrud, Telephone
Exchange, Pune – 411038, Maharashtra, India |
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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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Name : |
Mr. Robert Nicolas Barr |
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Designation : |
Director |
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Address : |
Lindfield, Faringdon Road, Abingdon, Oxfordshire OX 17, 1 BD |
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Date of Birth/Age : |
06.06.1958 |
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Date of Appointment : |
08.05.2007 |
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Name : |
Mr. Govin John Darby |
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Designation : |
Director |
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Address : |
Rodona House, Rodona, Weybridge, Surrey, Weybridge KT 130 NP |
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Date of Birth/Age : |
15.02.1956 |
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Date of Appointment : |
08.05.2007 |
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Name : |
Mr. Thomas Eric Hargreaves |
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Designation : |
Director |
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Address : |
Desmonds Barn, Howe Farm, Howe Road, Watlington, Oxfordshire, OX49
5EY, Watlington |
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Date of Birth/Age : |
13.02.1970 |
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Date of Appointment : |
08.05.2007 |
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Name : |
Mr. Ian Locke |
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Designation : |
Director |
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Address : |
38 ST Margarets Road, Swindon SN31RX, United Kingdom |
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Date of Birth/Age : |
18.02.1970 |
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Date of Appointment : |
08.05.2007 |
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Name : |
Mr. Frank John Sixt |
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Designation : |
Director |
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Address : |
Flat G/B, Knightsbride Court, No 28, Barker Road, the Peak, Hongkong –
852 |
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Name : |
Mr. Dennis Lui |
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Designation : |
Director |
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Address : |
Duplex 5, Dynasty Villa 8, Dynasty Heights, Beacon Hill, Kowloon – 852 |
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Name : |
Mr. Sandip Das |
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Designation : |
Nominee Das |
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Address : |
A – 31, Rutuparna Apartments, Near Kothrud Telephone Exchange, 40/1,
Kothrud, Pune – 411038, Maharashtra, India |
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Name : |
Mr. Christopher John Foll |
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Designation : |
Director |
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Address : |
9, 10th Floor, Duraj Apartments, Opposite, American
Consulate, Bhulabhai Desai Road, Mumbai – 400026, Maharashtra, India |
KEY EXECUTIVES
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Name : |
Mr. Sambasivan Ganesan |
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Designation : |
Company Secretary |
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Address : |
Flat No. 11, 6th Floor, Sudhadra Co-operative Housing
Society, N. S. Road, 6, J. V. P. D. Scheme, Mumbai – 400049, Maharashtra,
India |
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Date of Birth/Age : |
28.04.1967 |
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Date of Appointment : |
27.03.2007 |
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Name : |
Ms. K. Madhavi |
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Designation : |
Company Secretary |
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Address : |
Flat No. 201, Laburnum Towers, Mahindra Garens, S V Road, Goregaon [West],
Mumbai – 400062, Maharashtra, India |
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Date of Birth/Age : |
07.01.1963 |
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Qualification : |
30.06.2006 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
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No. of Shares |
|
Asim Ghosh |
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50 |
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Sandip Das |
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25 |
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Foll John Christopher |
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06 |
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Carolan Gtoffrey |
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01 |
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Sunil Ranka |
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01 |
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K Sankara Narayanan |
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01 |
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Hutchiosn Essar Limited |
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125107857 |
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Ramanathan Kumar |
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05 |
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Kannan Sriraman |
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06 |
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J Raghuram |
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05 |
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Industrial Development Bank of India |
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35000000 |
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Infrastructure Development Finance Company Limited |
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26000000 |
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Equity Share
Breakup |
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Category |
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Percentage of
Holding |
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Directors or relatives of directors |
|
100.00 |
BUSINESS DETAILS
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Line of Business : |
Providing Mobile Communication Service |
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Services : |
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GENERAL
INFORMATION
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Bankers : |
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Financial Institutional : |
Infrastructure
Development Finance Company Limited, ITC centre, 3rd Floor, 760
Anna Salai, Chennai – 600002 |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
A F. Fergusons and Company Chartered Accountants |
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Address : |
Deloittte Centre, Anchorage II, 100/2, Richmond Road,
Bangalore – 560025, Karnataka, India |
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Holding Company : |
BPL Communications Limited |
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Associates: |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
237,700,000 |
Equity Shares |
Rs. 85/- each |
Rs. 20204.500 Millions |
|
48,000,000 |
Preference Shares |
Rs. 100/- each |
Rs. 4800.000 Millions |
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Total |
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Rs. 25004.500
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
126,197,956 |
Equity Shares |
Rs. 85/- each |
Rs.
10726.826 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2006 [12 Months] |
01.04.2005 to
31.12.2005 [9 Months] |
31.03.2004 [12 Months] |
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|
SHAREHOLDERS FUNDS |
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1] Share Capital |
10726.826 |
12619.796 |
12619.796 |
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2] Share Application Money |
0.000 |
0.000 |
0.001 |
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3] Reserves & Surplus |
0.000 |
0.000 |
0.000 |
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4] (Accumulated Losses) |
[24182.194] |
[23650.974] |
[23897.286] |
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NETWORTH |
[13455.368] |
[11031.178] |
[11277.489] |
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LOAN FUNDS |
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1] Secured Loans |
19921.378 |
18857.783 |
17229.946 |
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2] Unsecured Loans |
3695.796 |
0.000 |
0.000 |
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TOTAL BORROWING |
23617.174 |
18857.783 |
17229.946 |
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DEFERRED TAX LIABILITIES |
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TOTAL |
10161.806 |
7826.605 |
5952.457 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
13330.382 |
9956.198 |
6507.523 |
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Capital work-in-progress |
1868.217 |
1582.365 |
723.285 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
23.394
|
17.949 |
21.562 |
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Sundry Debtors |
498.404
|
440.547 |
592.066 |
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Cash & Bank Balances |
619.628
|
232.019 |
297.900 |
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Loans & Advances |
1982.975
|
1074.666 |
1000.942 |
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Total
Current Assets |
3124.401
|
1765.181 |
1912.470 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
8133.315
|
5433.607 |
3174.277 |
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Provisions |
27.879
|
43.532 |
16.544 |
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Total
Current Liabilities |
8161.194
|
5477.139 |
3190.821 |
|
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Net Current Assets |
[5036.793]
|
[3711.958] |
[1278.351] |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
10161.806 |
7826.605 |
5952.457 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.12.2006 [12 Months] |
01.04.2005 to
31.12.2005 [9 Months] |
31.03.2004 [12 Months] |
|
|
Sales Turnover |
7969.198 |
3963.556 |
3647.062 |
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Other Income |
60.220 |
27.886 |
|
|
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Total Income |
8029.418 |
3991.442 |
3647.062 |
|
|
|
|
|
|
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|
Profit/(Loss) Before Tax |
[2406.286] |
[2938.887] |
[2358.139] |
|
|
Provision for Taxation |
17.903 |
6.787 |
-- |
|
|
Profit/(Loss) After Tax |
[2424.189] |
[2945.674] |
[2358.139] |
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Earnings in Foreign Currency : |
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Service Income |
|
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Total Earnings |
NA |
NA |
185.317 |
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Imports : |
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Capital Goods |
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Total Imports |
NA |
NA |
565.625 |
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Expenditures : |
|
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|
Handsets and Fixed cellular terminals |
0.000 |
0.000 |
0.204 |
|
|
SIM Cards |
0.000 |
0.000 |
54.215 |
|
|
Operating Expenses |
0.000 |
0.000 |
2689.310 |
|
|
Miscellaneous Expenditure Written off |
0.000 |
0.000 |
355.446 |
|
|
Raw Material Consumed |
79.309 |
61.506 |
0.000 |
|
|
Salaries, Wages, Bonus, etc. |
503.290 |
336.082 |
0.000 |
|
|
Managerial Remuneration |
0.000 |
0.000 |
0.000 |
|
|
Payment to Auditors |
8.522 |
6.484 |
0.000 |
|
|
Interest |
1711.170 |
1956.388 |
0.000 |
|
|
Insurance Expenses |
5.435 |
0.504 |
0.000 |
|
|
Power & Fuel |
21.109 |
10.761 |
0.000 |
|
|
Depreciation & Amortization |
2063.480 |
1494.529 |
0.000 |
|
|
Other Expenditure |
6043.388 |
3064.074 |
0.000 |
|
Total Expenditure |
10435.703 |
6930.328 |
3099.175 |
|
KEY RATIOS
|
PARTICULARS |
|
31.12.2006 [12 Months] |
01.04.2005 to 31.12.2005 [9 Months] |
31.03.2004 [12 Months] |
|
PAT / Total Income |
(%) |
[30.19]
|
[73.80] |
[64.66] |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
[30.19]
|
[74.15] |
[64.66] |
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|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
[14.62]
|
[25.07] |
[28.01] |
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|
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|
|
Return on Investment (ROI) (PBT/Networth) |
|
[0.18]
|
[0.27] |
[3.09] |
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|
Debt Equity Ratio (Total Liability/Networth) |
|
2.36
|
2.21 |
1.81 |
|
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|
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|
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|
Current Ratio (Current Asset/Current Liability) |
|
0.38
|
0.32 |
0.60 |
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.
Fixed assets
- Freehold Land
- Leasehold Land
- Building
- Network Equipment
- Computers
- Office Equipment
- Furniture and fixture
- Vehicles
Bankers Charges
Report as per Registry
|
Name of the company |
BPL MOBILE CELLULAR
LIMITED |
|
Presented By |
G. Sambasivan Company
Secretary |
|
1) Date and description of instrument creating the change |
22.03.2002 Deed
of hypothecation executed by the company in favour of infrastructure
development finance company limited. A certified copy of the said deed of hypothecation
is enclosed. |
|
2) Amount secured by the charge/amount owing on the securities of charge |
The Bridge Loan
of Rs. 200.000 Millions agreed to be lent and advanced by IDFC to the company
together with interest, additional interest, liquidated damages, cost,
charges, expenses, and other monies payable by the company to IDFC in terms
of the Bridge Loan agreement dated the 22.03.2002 between the company of the
one part and IDFC of the other part. |
|
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 |
The whole of the
moveable properties of the company including its movable plant and machinery,
machinery spares, tools and accessories and other movables, both present and
future whether installed or not and whether now lying loose or in cases or
which are now lying or stored in or about or shall hereafter from time to
time during the continuance of the security of these presents be brought into
or upon or be stored or be in or about all the Company’s factories, premises
and Godowns main switching centres, cellsites and godowns situate in the
State of Tamilnadu, Maharashtra, Kerala, Goa and Karnataka and Union
Territory of Pondicherry or wherever else and same may be or be held by any
party to the order or disposition of the Company or in the course of transit
disposition of the company or in the course of transit or on high seas or on
order, or delivery, however and wheresoever in the possession of the company
and either by way of substitution or addition. |
|
4) Gist of the terms and conditions and extent and operation of the charge. |
The charge
operates as security, interalia, for the due repayment by the Company to IDFC
of its Bridge Loan Rs. 200.000 Millions, together with all interest,
additional interest, liquidated damages, commitments charges, premia on
prepayment costs, charges, expenses and all moneys in terms of the said
Agreement. The charge in
favour of IDFC under the said deed of hypothecations subject to the charges
created by the company in favour of its bankers on the company’s stock of raw
materials, semi finished and finished goods and consumables stores and book
debts an such other movables as may be specifically permitted to secure its
working capital requirements in the ordinary course of business. The company has
undertaken to keep the goods hypothecated in marketable and good condition at
its own costs and to insure the same in the joint names of the Company and
IDFC. All the goods
hypothecated and all realizations and insurance proceeds thereof and all
documents in respect of the said security are to be kept distinguishable and
held as the exclusive property of IDFC. The security
created under the said Deed of Hypothecation is to be a continuing
security. |
|
5) Name and Address and description of the person entitled to the charge. |
Infrastructure
Development Finance Company Limited, ITC centre, 3rd Floor, 760
Anna Salai, Chennai – 600002 |
|
6) Date and brief description of instrument modifying the charge |
-- |
|
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. |
-- |
|
Corporate
identity number of the company |
U64202TZ1995PLC007674 |
|
Name of the
company |
BPL MOBILE CELLULAR LIMITED |
|
Address of the
registered office or of the principal place of business in India of the company |
BPL Centre, 1045/46, Avinashi Road, Coimbatore - 641018, Tamilnadu, India |
|
This form is for |
Creation of
Charge |
|
Type of charge |
Hypothecation
|
|
Particular of
charge holder |
Axis Bank Limited
Universal Insurance
Building Sir P. M. Road, Fort, Mumbai – 400021, Maharashtra, India |
|
Nature of
instrument creating charge |
Deed of
hypothecation of machinery and other movable fixed assets |
|
Date of
instrument Creating the charge |
27.02.2006 |
|
Amount secured by
the charge |
Rs. 250.000
Millions |
|
Description of
the property charged indicating whether it is a charged on |
|
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 25000 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 44000 Millions). The business carries a debt of Rs 19000 Millions. This
means that Essar has acquired BPL Communications for around Rs 25000 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 1,600 crore 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 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 19000 Millions, sources
within financial circles told ET that it is higher, in the range of Rs
2,2000-2,3000 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 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
Press Releases
Vodafone
and Essar agree partnership terms
15 March 2007
Vodafone and Essar have reached an agreement under
which they will work to continue the growth of Hutchison Essar Limited
("Hutchison Essar"), one of India’s leading mobile operators.
This follows Vodafone’s announcement on 11 February 2007 that it had agreed to
acquire Hutchison Telecommunications International Limited's ("HTIL")
controlling interest in Hutchison Essar, in which Essar is and will continue to
be a 33% shareholder.
The partners have agreed that Hutchison Essar will
be renamed Vodafone Essar and, in due course, that the business will market its
products and services under the Vodafone brand.
With penetration levels of around 13%, both
partners believe that there are substantial growth opportunities in the Indian
mobile telecommunications market. Vodafone is the leading international mobile
operator with an extensive range of products and services, many of which are
not currently available in India. Essar is a major industrial group with
a deep understanding of India and the Indian mobile telecommunications
industry. With these complementary strengths Vodafone and Essar plan to
broaden Vodafone Essar’s service offering and enable it to become the leader in
the Indian mobile telephony market.
Commenting on the new partnership, Arun Sarin,
Chief Executive of Vodafone said:
"I am delighted that Essar and Vodafone have
agreed the terms of an ongoing partnership. Essar has played a key role in
transforming this business into a leading Indian mobile operator. We look
forward to leveraging this experience and working with our partner as the
company enters its next phase of growth in the attractive Indian
telecommunications market. We will be bringing the relevant range of Vodafone
products and services to the Indian consumer."
Ravi Ruia, Vice Chairman of Essar, added:
"It is terrific that we are joining with the
world’s leading international mobile company. I welcome them as our
partner into this successful business which we will now take forward to the
next level. Essar was a founding partner in Hutchison Essar and played an
active role in building the company, including extending network coverage into
several profitable regional markets. By partnering with Vodafone we
expect to create further value in the business.”
Under the terms of the partnership, Vodafone will have operational control of
Vodafone Essar and Essar will have rights consistent with its shareholding,
including proportionate Board representation. Ravi Ruia will be appointed by
Vodafone as Chairman of Vodafone Essar and Arun Sarin will be appointed by
Essar as Vice Chairman.
Essar will have certain liquidity rights including,
between the third and fourth anniversaries of completion, and subject to
regulatory requirements, an option to sell its 33% shareholding in Vodafone
Essar to Vodafone for US$5 billion or an option to sell between US$1 billion
and US$5 billion worth of Vodafone Essar shares to Vodafone at an independently
appraised fair market trading value.
Vodafone expects to complete the acquisition of
HTIL's interest in Hutchison Essar in the coming weeks.
Notes to Editors
About Vodafone
Vodafone is the world’s leading international
mobile communications group with operations in 25 countries across five continents
and over 200 million proportionate customers by the end of January 2007, as
well as 36 partner networks.
About Essar
Essar is one of India’s large corporate houses with
20,000 staff and business interests spanning high growth infrastructure sectors
of steel, oil & gas, power, telecommunications, shipping & logistics
and construction. The group has built a portfolio of assets with expected
revenues of US$10 billion in the year to March 2008.
About Hutchison Essar
Hutchison Essar, which will be renamed Vodafone
Essar, is a leading Indian telecommunications mobile operator with 25 million
customers currently, representing a 16.4% national market share. Hutchison
Essar has over 6,000 employees, operates in 16 circles and has licences in an
additional six circles. In the year to 31 December 2005, Hutchison Essar
reported revenue of US$1.3 billion, EBITDA of US$415 million, and operating
profit of US$313 million. In the six months to 30 June 2006, Hutchison Essar
reported revenue of US$908 million, EBITDA of US$297 million, and operating
profit of US$226 million.
Up until January 2006, Hutchison Essar had licences
in 13 circles, of which nine have 900 MHz spectrum. In January 2006, Hutchison
Essar acquired BPL Mobile Cellular Limited, thereby adding three circles, each
operating with 900 MHz spectrum. In October 2006, Hutchison Essar acquired
Spacetel, adding six further licences, with operations planned to be launched
during 2007.
The results of Hutchison Essar are prepared in
accordance with Hong Kong Financial Reporting Standards which may differ in
material respects from the accounting principles applied by Vodafone.
Important information
All company data relating to Hutchison Essar is
derived from publicly available information about Hutchison Essar. Financial
information for the year to 31 December 2005 and half year to 30 June 2006 has
been translated using an exchange rate of US$1:HK$7.8.
Market data is based on information from the
Cellular Operator Association of India (“COAI”) and the Association of Unified
Telecom Service Providers of India (“AUSPI”).
Cabinet clears Vodafone-Essar FDI deal
By R
Jai Krishna
City :
New Delhi, India
The Union Cabinet, which met under the chairmanship of Union Finance
Minister, P Chidambaram has cleared the Vodafone-FDI deal. The Cabinet had thus
allowed all seven subsidiaries to take note of the aggregate of direct and
indirect shareholding of up to 74 percent.
The decision was taken on the recommendations of Foreign
Investment Promotion Board (FIPB) in its meeting held on 27th July, 2007.
However, there will be no fresh FDI inflows. The subsidiary companies, which
have been cleared, are Essar Spacetel Limited of Essar Spacetel Limited; Fascel
Limited of Vodafone Essar Gujarat Limited, Hutchinson Essar Cellular Limited;
and Hutchinson Essar Mobile Services Limited Hutchison Essar South Limited, the
holding company of Vodafone Essar South Limited, Hutchison Telecom East
Limited, which is now Vodafone Essar Digilink Limited and Aircel Digilink India
Limited, are the other subsidiary companies.
With the
much-awaited Cabinet approval, the decks have been cleared for Vodafone Essar
to roll out thier services under the new brand name.
Vodafone finishes off deal
for Hutch in India
Now casts an eye westward
By Tony Dennis: Friday 16 March 2007, 10:35
VODAFONE HAS clinched a deal with India's Essar Group over its
controlling interest in Hutch – India's fourth largest cellular operator. The
company will rename as Vodafone Essar.
Part
of the deal sees Essar's Ravi Ruia becoming chairman of company while
Vodafone's Arun Sarin, will act as vice chairman. Sarin has said that he wants
Vodafone Essar to become the leading player in India by 2010.
The
way in which the agreement has been reached could prove controversial.
Hutchison Telecommunications International Limited (HTIL) – whose stake
Vodafone is acquiring – has apparently agreed a payment to Essar of around $415
million.
In
return Essar will drop any attempts it might have made to claim first rights to
buy the HTIL stake of 67 per cent instead of Vodafone. The agreement shows that
Essar fully intends to co-operate with Vodafone in the new company.
There
may be a snag, however. Indian law prevents a foreign company from owning more
than 74 per cent of a native telecommunications company. Vodafone has
off-loaded part of its share onto two Indian nationals - Analjit Singh and
Hutchison Essar's managing director, Asim Ghosh.
The
catch is that part of Essar's stake is held overseas. So in total, more than 74
per cent could be regarded as being in 'foreign' hands.
Sarin
does appear to have achieved his objective of breaking into what is the world's
fastest expanding cellular market. The question is where does Vodafone look
next?
One
obvious answer would be the former Soviet Republics. But Telenor of Norway's experience
in a previous part of Russia – the Ukraine – doesn't bode well.
Presently
Telenor is locked in a protracted legal battle with Russia's Altimo over
Ukraine's largest mobile operator, Kyivstar. A serious slanging match between
the two is currently underway.
So
where could Vodafone exploit its forthcoming expertise in providing cellular
services to remote rural communities whose residents have low incomes but poor
existing telecoms infrastructure?
Sounds
like America to the INQ. And not just South America but North America. Pity
Vodafone is locked into cdmaOne operator, Verizon, then.
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
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.39.36 |
|
UK Pound |
1 |
Rs.80.31 |
|
Euro |
1 |
Rs.57.79 |
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 |
NO |
|
--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. |
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 |
|