MIRA INFORM REPORT
|
Report
Date : |
26.12.2006 |
IDENTIFICATION
DETAILS
|
Name : |
IDEA MOBILE COMMUNICATIONS LIMITED |
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Formerly
Known : |
ESCOTEL MOBILE COMMUNICATIONS LIMITED |
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Registered
Office : |
A-30, Mohan Co-operative Industrial Estate, Mathura Road,
New Delhi 110 044, India. |
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Country: |
India |
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Financials
(as on): |
31.03.2005 |
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Date
of Incorporation : |
25.05.1995 |
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Com.
Reg. No.: |
55 – 68988 |
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CIN
No.: [Company Identification No.] |
U74899DL1995PTC068988 |
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TAN
No.: (Tax
Deduction & Collection Account No.) |
DEL104979C |
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Legal
Form : |
A Closely Held Public Limited
Liability Company |
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Line
of Business : |
The company is engaged in
providing Cellular Services, Cellular Telephone, SIM Card. |
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 : |
Usually
correct |
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Litigation
: |
Clear |
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Comments
: |
Subject is an established company having moderate track
records. Profit margin is under severe pressure. Payments are usually correct
and as per commitments. The company can be considered for normal business dealings
at usual trade terms and conditions. |
LOCATIONS
|
Registered
Office/ Head
Office : |
A-30,
Mohan Co-operative Industrial Estate, Mathura Road, New Delhi 110 044, India |
|
Tel.
No.: |
91-11-5560 7700 / 66615555 |
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Fax
No.: |
91-11-5560 7714 / 66615499 |
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E-Mail
: |
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Website: |
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Area : |
Large |
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Location: |
Owned- Commercial |
DIRECTORS
|
Name : |
Mr Rajan
Nanda |
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Designation
: |
Chairman |
|
Address: |
2 Friends
Colony, New Delhi – 110 065, India. |
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Date
of Birth/Age : |
15/10/1942 |
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Qualification: |
Graduate |
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Date
of Appointment : |
28/11/1995 |
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Name : |
Mr
Wallace F Paul, Foreigner |
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Designation
: |
Director |
|
Address: |
24 F Two
Exchange Square, 8 Connaught Palace, Hong Kong. |
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Date
of Birth/Age : |
27/06/1950 |
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Date
of Appointment : |
30/04/2003 |
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Name : |
Mr
Thacker Premji Vijay |
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Designation
: |
Director |
|
Address: |
7-34
Shyam Vilas, B Desai Marg, Mumbai, Maharashtra, India |
|
Date
of Birth/Age : |
21/06/1960 |
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Date
of Appointment : |
28/11/1995 |
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|
Name : |
Mr
Pangilinan V Manuel |
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Designation
: |
Director |
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Address: |
24 F Two
Exchange Square, 8 Connaught Palace, Hong Kong. |
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Date
of Birth/Age : |
14/07/1946 |
|
Date
of Appointment : |
28/11/1995 |
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|
Name : |
Mr
Pasricha Uday |
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Designation
: |
Director |
|
Address: |
E 4
Palmsprings, 104 Cuffe Parade, Colaba, Mumbai – 400 005, Maharashtra, India. |
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Date
of Birth/Age : |
05/04/1957 |
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Date
of Appointment : |
19/01/1996 |
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|
Name : |
Mr
Edwards L Christopher Foreigner |
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Designation
: |
Director |
|
Address: |
Mill
Batch, Blackford Road, Mark High Bridge, Somerset, Ta 9 4 NR, Uk. |
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Date
of Birth/Age : |
24/01/1948 |
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Date
of Appointment : |
14/01/2000 |
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Name : |
Mr N G
Hong Pong Joseph Foreigner |
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Designation
: |
Director |
|
Address: |
Flat 4 –
B, Tower – 2, Robinson Heights, No 8, Robinson Road, Hong Kong. |
|
Date
of Birth/Age : |
18/09/1962 |
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Date
of Appointment : |
14/01/2000 |
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|
|
|
Name : |
Mr
Swaroop Rajan |
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Designation
: |
Whole
Time Director |
|
Address
: |
No. 9, 2nd
Floor, Panchsheela Park, New Delhi – 110 017. |
|
Date
of Birth/Age : |
23/01/1957 |
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Date
of Appointment : |
30/04/2003 |
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|
Name : |
Mr
Virmani Anil |
|
Designation
: |
Director |
|
Address
: |
J 173, 2nd
Floor, Saket, New Delhi – 110 017. |
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Date
of Birth/Age : |
10/09/1951 |
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Date
of Appointment : |
30/04/2003 |
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|
Name : |
Mr
Tortoric A Edward Foreigner |
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Designation
: |
Director |
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Address
: |
24 F Two
Exchange Square, 8 Connaught Palace, Hong Kong. |
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Date
of Birth/Age : |
24/11/1939 |
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Date
of Appointment : |
30/04/2003 |
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|
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|
Name : |
Mr Rae
James Donald Foreigner |
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Designation
: |
Director |
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|
C/o,
Smart Communications, INC Smart Towers, 6799 Ayala Avenue, Makati City,
Phillipines. |
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Date
of Birth/Age : |
21/04/1961 |
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Date
of Appointment : |
30/04/2003 |
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|
Name : |
Ms Mandal
Vidya |
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Designation
: |
Company
Secretary |
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Address
: |
1612, Sectro 28, Faridabad – 110 003, Haryana. |
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Date
of Birth/Age : |
26/03/1962 |
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Date
of Appointment : |
08/12/1997 |
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|
|
Name : |
Mr.
Nadkarni Girish |
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Designation
: |
Director |
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Address
: |
Sushila
Niwas, Saraswati Baug Society Road, Andheri, Mumbai – 400 060, India. |
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Date
of Birth/Age : |
21.10.1968 |
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Date
of Appointment : |
10.06.2004 |
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|
|
Name : |
Mr.
Mysore R Prasanna |
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Designation
: |
Director |
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Address
: |
901
Citadel, 9th Floor, 188 LD Ruparel Marg, Malbar Hills, Mumbai –
400 006, India. |
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Date
of Birth/Age : |
07.04.1947 |
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Date
of Appointment : |
10.06.2004 |
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|
|
Name : |
Mr. Ty
Graham |
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Designation
: |
Director |
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Address
: |
7277, 164
Avenue NE, Redmond, WA 98052 |
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Date
of Birth/Age : |
27.04.1962 |
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Date
of Appointment : |
10.06.2004 |
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|
|
Name : |
Mr. Jain
Kapish |
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Designation
: |
Director |
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Address
: |
101,
Sector 21 B, Faridabad – 121 001, Haryana. |
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Date
of Birth/Age : |
09.10.1954 |
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Date
of Appointment : |
10.06.2004 |
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|
|
|
Name : |
Mr. Mehmi
Vikram |
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Designation
: |
Director |
|
Address
: |
Flat No.
5, Building 9, Atur Park Naylor Road, Pune – 411 001, Maharashtra, India. |
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Date
of Birth/Age : |
13.11.1953 |
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Date
of Appointment : |
10.06.2004 |
MAJOR SHAREHOLDERS
|
Names of Shareholders |
No. of Shares |
|
Jain
Kumar Lalit |
40 |
|
Virmani
Anil |
14 |
|
Mathur
Behari Girish |
280 |
|
Wadhera
Anil |
14 |
|
Escorts
Limited |
268,259,652 |
|
First
Pacific Company Limited |
52,600,000 |
|
Personal
Communications (Mauritius) Limited |
205,140,000 |
|
Idea
Cellular Limited with Mr. Pravesh Aghi |
54 |
|
Idea
Cellular Limited with Mr. Bimal Khandewal |
20 |
|
Idea
Cellular Limited with Mr. Satish Rajgarha |
61 |
|
Idea
Cellular Limited with Mr. Sudhir Mathur |
86 |
|
Idea
Cellular Limited with Mr. Vikram Nehmi |
91 |
|
Idea
Cellular Limited with Mr. Rajat Mukarji |
36 |
|
Idea
Cellular Limited |
52999652 |
BUSINESS DETAILS
|
Line
of Business : |
The company is engaged in
providing Cellular Services, Cellular Telephone, SIM Card. |
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Product:
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GENERAL INFORMATION
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Bankers
: |
Standard Chartered Bank Industrial Development Bank of India Limited IDBI Tower, WTC Complex, Cuffe Parade, Colaba, Mumbai –
400005 Union Bank of India Union Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman Point,
Mumbai – 400021 Bank of Baroda Mumbai Main Branch, 10/12, Mumbai Samachar Marg, Fort,
Mumbai – 400023 UTI Bank Limited Sterling Plaza, 1262/B, Jangi Maharaj Road, Deccan
Gymkhana, Pune – 411004 Canara Bank Warden House, Sir P. M. Road, Fort, Mumbai – 400001 Uco Bank Mafatlal Centre, 1st Floor, Nariman Point,
Mumbai – 400021 United Bank of India United Bank of India Building, 25, Sir Pheroze Shah, Mehta
Road, Fort, Mumbai – 400021 Dena Bank Ashok Chambers, J M Road, Deccab Gymkhana, Pune – 411004 HDFC Bank Limited Millennium Towers, 885/1, Bhandarkar Road, Pune – 411004 Jammu and Kashmir Bank 79A, Mehta House4, Bombay Samachar Marg, Fort, Mumbai – 400023 State Bank of Saurashtra 17/18-A, Nariman Bhavan, Nariman Point, Mumbai – 400021 Punjab National Bank Maker Tower, E, Ground Floor, Cuffe Parade, Mumbai –
400005 Life Insurance Corporation of India Togaksheema, Jeevan Bima Marg, Mumbai – 400021 Insurance Development Finance Company Limited Ramon House, 169 Backbay Reclamation, Mumbai – 400020 Small Industries Development Bank of India Mumbai Branch office, SME Development Centre, C-11, Bandra
Kurla Complex, Bandra [East] Mumbai – 400051 Export Import Bank of India Center One Building, Floor No. 21, World Trade center
Complex, Cuffe Parade, Mumbaqi - 400005 |
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Facilities : |
Notes:
v The fixed movable assets and
current assets of the company both present v All tangible assets of the company
both present & future (excluding Licenses) v All the right, title benefit,
claims and demands whatsoever of the company, in to under or in respect of
the project Documents (other than the license Agreement and the Tripartite
Agreement) v All the right, title benefit,
claims and demands whatsoever of the company, in to under or in respect of a)
Any
letter of credit, guarantee or performance bond that may be provided by any
party to the company duly acknowledged and conented to, where required, by
the relevant parties b)
All
the right, title benefit, claims and demands whatsoever of the company, in
the clearances in relation to the project. c)
Insurance
Contracts / insurance proceeds in relations to the project.
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Banking Relations : |
-- |
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Auditors
: |
Price Water House Chartered Accountants P-1, Aditya Vihar, Saidullajab,
Opp. D Block, Saket, Mehrauli-Badarpur Road, Delhi – 110030, India A. F. Ferguson and Company Chartered Accountants 9, Scindia House, Kasturba Gandhi Marg, Connaught Place,
New Delhi – 110001, India |
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Associates/Subsidiaries
: |
Ř Escorts Telecommunication Limited Ř Escosoft Technologies Limited Ř Escorts Heart Institute and
Research Centre Ř Cellnext Solutions Limited Ř Escorts Finance Limited Ř Escorts Hospital and Research
Centre |
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Holding
Company: |
v Escorts Limited v Idea Cellular Limited |
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Subsidiaries:
|
v Vaspte Investment Private Limited v Asian Telephone Services Limited v Swinder Singh Satara & company
Limited v Escorts Telecommunication Limited* v Escorts Heart Institute and
Research Center* v Escorts Finance Limited* v Iserv India Solutions Private
Limited* v Bhagalakshmi Investment Private
Limited v BTA Cellcom Limited v Sapte Investments Private Limited v Escorts Technologies Limited* v Cellnext Solutions Limited* v Escorts Hospital and Research
Centre* (* for the period 01.04.2004 to 10.06.2004) |
|
|
|
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Affiliates:
|
Ř First Pacific Company Limited Ř Personal Communications (Mauritius)
Limited |
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
766,000,000 |
Equity Shares |
Rs.10.-
each |
Rs. 7660.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
526,000,000 |
Equity Shares |
Rs.10.-
each |
Rs. 5260.000 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share
Capital |
5260.000 |
5260.000 |
5260.000 |
|
|
2] Advance Against Equity |
0.000 |
0.000 |
0.000 |
|
|
3]
Reserves & Surplus |
0.000 |
0.000 |
0.000 |
|
|
4]
(Accumulated Losses) |
(9815.690) |
(9980.810) |
(9642.889) |
|
NETWORTH
|
(4555.690) |
(4720.810) |
(4382.889) |
|
|
LOAN
FUNDS |
|
|
|
|
|
1]
Secured Loans |
1001.050 |
7503.760 |
6565.593 |
|
|
2]
Unsecured Loans |
8560.220 |
2507.360 |
1845.133 |
|
TOTAL
BORROWING
|
9561.270 |
10011.120 |
8410.726 |
|
|
DEFERRED
TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
TOTAL
|
5005.580 |
5290.310 |
4027.837 |
|
|
|
|
|
|
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APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
6083.000 |
5977.020 |
6213.387 |
|
Capital work-in-progress
|
483.910 |
269.390 |
54.029 |
|
|
|
|
|
|
|
INVESTMENT
|
0.000 |
0.000 |
0.000 |
|
DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
17.590
|
27.160
|
25.825 |
|
|
Sundry Debtors
|
283.180
|
285.140
|
170.268 |
|
|
Cash & Bank Balances
|
143.210
|
207.680
|
100.313 |
|
|
Other Current Assets
|
0.000
|
0.000
|
0.000 |
|
|
Loans & Advances
|
1200.870
|
608.990
|
315.560 |
Total Current Assets
|
1644.850
|
1128.970
|
611.966 |
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
3067.860
|
1991.640
|
2837.419 |
|
|
Provisions
|
138.320
|
93.430
|
14.126 |
Total Current Liabilities
|
3206.180
|
2085.07
|
2851.545 |
|
Net
Current Assets
|
(1561.330)
|
(956.100)
|
(2239.579) |
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
TOTAL
|
5005.580 |
5290.310 |
4027.837 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
7134.333 |
5082.270 |
4393.411 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
178.073 |
(337.920) |
(1051.099) |
Provision for Taxation
|
12.950 |
0.000 |
0.000 |
Profit/(Loss) After Tax
|
165.123 |
(337.920) |
(1051.099) |
|
|
|
|
|
Export Value
|
133.430 |
NA |
NA |
|
|
|
|
|
Total Expenditure
|
6956.260 |
3350.770 |
2811.993 |
KEY
RATIOS
|
PARTICULARS |
|
31.03.2006 |
31.03.2005 |
31.03.2004 |
PAT / Total Income
|
(%)
|
2.31 |
(6.65)
|
(23.92) |
|
|
|
|
|
|
Net Profit Margin
(PBT/Sales) |
(%) |
2.50 |
(6.65)
|
(25.61) |
|
|
|
|
|
|
Return on Total Assets
(PBT/Total
Assets} |
(%) |
2.30 |
(4.58)
|
(6.36) |
|
|
|
|
|
|
Return on Investment (ROI)
(PBT/Networth) |
|
(0.04) |
(7.16)
|
(0.24) |
|
|
|
|
|
|
Debt Equity Ratio
(Total
Liability/Networth) |
|
(2.80) |
(2.56)
|
(2.57) |
|
|
|
|
|
|
Current Ratio
(Current
Asset/Current Liability) |
|
0.51 |
0.54
|
0.21 |
LOCAL AGENCY FURTHER INFORMATION
The subject was formerly known
Escotel Mobile Communications Private Limited and subsequently changed to Idea
Mobile Communications Limited w.e.f. July 1, 2004 as per the Registrar of
Companies letter No. ROC/21/55-68988/713 dated July 1, 2004
On January 15, 2004 Escorts Limited (Escorts), First Pacific
Company Limited (FPC) and Personal Communications (Mauritius) Limited (the
Promoters), whole hold 51%, 10% and 39% respectively in the Company have
entered into a Share Sale and Purchase Agreement (SSPA) agreement with Idea
Cellular Limited (Idea) to divest their stake in the Company to Idea Cellular
Limited.
Incorporated on May 21, 1995 the subject is engaged in the
business of Providing Cellular Services
Subject reportedly imports
cellular phones and other communication equipments
|
Particulars |
31-Mar-2004 |
31-Mar-2003 |
||
|
Value (Rs. In Lac) |
% of Consumption |
Qty (Nos) |
% of Consumption |
|
|
Imported |
- |
- |
4.22 |
90.17 |
Subject provides communication services and generate income
from overseas
Operations/Business:
40% in Uttar Pradesh (West)
26% in Haryana
33% in Kerala
Financial
Results:
The company’s accumulated losses exceed the shareholder
funds however, the company’s operating to improve during the year. The income
of the company recorded a growth of 22.20% from the previous year whereas net
loss for the year reduced by 68% as compare to the previous year. The company
has also received confirmation from its holding company fro the necessary
financial and business support. In view of the share, the accounts for the year
have been prepared on a going concern basis.
Share
Capital:
The issued and paid up capital Share capital of the company
is Rs. 5260.000 Millions as at 31.03.205, which is unchanged from last year the
company’s ownership changed by way of a 100% equity buy about of the company’s
share Capital by Idea Cellular Limited. From Escorts Limited. First pacific
Company Limited. and Personal Communication (Mauritius) Limited., its erstwhile
shareholders.
Dividend:
Since the company has incurred losses during the year, no
dividend has been recommended by the Board of Directors.
Operations:
Over the financial year of the company has maintained a
steady growth and has grown from 989 customers to 1385 customers i.e. growth of
40%. The company achieved a turnover of Rs. 5368.620 Millions and an EBITDA of
Rs. 2017.850 Millions representing an increase of 22.20% and 27.40%
respectively over the last year. The growth trends have been maintained in
spite of intense competition from 5 Cellular /CDMA operators in each circle and
an enormous drop in tariffs across the country.
The company maintained its strong position in each of its
circles despite the intense competition and closed the year with a market share
of 38%, 20% and 27% in UP (West), Haryana and Kerala respectively.
Marketing
Update:
During the year under review, the company has continued its
extensive efforts on the marketing front by introducing various marketing
initiatives across all its circles of operations. Some of the major marketing
initiatives are:
VAS Services
During the year, the company has launched various new VAS
services. Among SMS services major launches were cricket alerts, SMS services
of CNBC TV 18, Contests, picture messages, logos ringtone services etc. Among
voice services major launches were, indiatimes voice service.
Dialer
Tones:
The company has launched an existing and entertaining
service called Dialer Tones under which IDEA’S customers can set their Ringing
tone for caller from a choice of tunes, ranging from Bellwood film songs o
International hits, wacky sounds to instrumental music and even their own
voice, among other tunes. The best feature of the product is that Tones can be
customized caller wise- Friends can get a special tone and family can get an
altogether different tone World wide this service is extremely popular and one
of most accessed value added services.
Launch
of LIFETIME IDEA:
The company has launched a unique special programme
‘LIFETIME IDEA’ for the prepaid subscriber. This special programme allows Bonus
Talk time to its customers depending upon hoe long the customer stayed on IDEA
network. It is the first and only loyalty program, for prepaid customers,
introduced by a Cellular brand.
Sibnificant
Industry Developments:
Industrial
Growth:
The Indian
mobility industry has continued to maintain its fast pace growth during the
financial year 2004-05 growing at around 55% with total mobility subscribers
touching 51.700 Millions subscribers by March 2005, mainly driven by intense
competition, aggressive pricing and increased network coverage. Further, the
industry has achieved a milestone by exceeding the number of fixed subscribers.
Increase
in FDI Limit:
The government had cleared the long discussed proposal to
hike Foreign Direct Investment limit in telecom sector to 74% form the current
49%. The increase in the FDI limit is expected to user in a 20% jump in foreign
investments in the telecom sector within next 2 years. However few restrictions
have been imposed such as:
v
Majority
of Board members have to be Indians
v
10% of
the equity will have to be held by the Indian promoters etc.
TRAI’s
recommendation on Unified Licensing regime:
TRAI had
issue dits final recommendations to the DOT on the unified licencing regime.
The
recommendation were as under:
v
Registration
charges equivalent to entry fee comprising NLD+ILD+ a proportion of entry fee
paid by new BSOs.
v
Revenue
share licence fees reduced to 6% of Adjusted Gross Revenue from currently 15%
v
Migration
is optional at this stage, but will be mandatory after 5 Years.
v
Reselling
is not permitted at this stage.
The
department of Telecommunication is yet to finalize its policy on the same.
New ADC
Regime
TRAI had
announced a new Access Deficit Charge (ADC) regime effective from 01.02.2005
which will result in lower pries for domestic consumers. Key changes are as
follows:
v
ADC on National Long Distance calls reduced to
30 paise against 30, 50 & 80 paise for the 0-50, 50-200 & >200 km
paid earlier
v
ADC on
International outgoing calls reduced to Rs. 2.50/ minute as against Rs. 4.25*
minute earlier.
v
ADC on
International incoming calls reduced to Rs. 3.25 / minute as against Rs. 4.25/
minute earlier.
TRAI
Regulation on Access to Information:
A
regulation has been issued to protect the confidentiality of the document filed
by the service providers with the authority. A service provider claiming
confidentially of document filed shall give reason for keeping the information
confidential.
Fixed
Assets:
Land,
Leasehold Land, Building, Leasehold Improvement, Plant & Machinery,
Furniture & Fixture and Vehicles etc.
Interconnection
Usage Charge (IUC) Regime
Pursuant to TRAI Regulation 2003, IUC regime was implemented
from 1st May 2003. As a result Airtime
on incoming calls is not leviable and cost based interconnection charges have
been specified for organisation, carriage and termination of calls. Additionally, access deficit charges are
payable to basic service providers in respect of calls made from cellular to
cellular and cellular to fixed subscribers.
The regulations were further amended /modified due to certain anomalies
in the charges and revised regulations were implemented from 1st February 2004.
Transfer of Licence
In respect of transfer/assignment of licenses, DOT issued an
amendment on 2nd June 2003, permitting transfer of licenses whenever
amalgamation or restructuring i.e. merger or demerged is approved by the High
Court in accordance with the provisions of the Companies Act 1956, provided the
transferee is fully eligible in accordance with eligibility criteria contained
in Tender conditions for grant of fresh license in that area. This is to enable consolidation of business
and to manage operations efficiently.
Earlier a licensee company was barred from creating any third party
right in any manner whatsoever.
Unified Access Service License (UASL) (Basic and Cellular)
Purusant to TRAI recommendation, DOT issued guidelines for
Unified Access Services License on 11th November 2003, unifying Basic and
Cellular Mobile Services within the service area. This provides an option for existing Basic Service Operator (BSO)
to migrate to UASL for a service area, the entry fee for which will be equal to
entry fee paid by the 4th CMTS provider.
Reduction in License Fee
The Government of India announced a package of financial
relief to help alleviate financial strain on cellular operators and issued
amendment to the license agreement on 27th January 2004 reducing the license
fee by 2% for all Telecom Service Providers.
Further in view of high entry fee paid by the 1st and 2nd CMTS Circle
operators compared to 4th CMTS licensees, license fee for 1st and 2nd circle
operators has been further reduced by another 2% with effect from 1st April
2004 for a period of 4 years.
Wireless in Local Loop (WLL)
On October 28, 2003 the Cellular Operators Association of
India (COAI) filed an appeal in the Supreme Court against the Telecom Dispute
Settlement and Appellate Tribunal's (TDSAT) majority judgment, which had
allowed liability mobility (WLL) services to basic Operators.
Idea to
invest Rs 2000 Millions in Escotel areas
Mid
Day — January 20, 2004
Idea Cellular the three way joint venture between Tatas,
Birla and US based AT&T is to invest Rs
2000 Millions in expanding the network and facilities, in the three
circles of UP West, Haryana and Kerala
of Escotel Mobile Communications which it took over.
“We expect the integration process of the six circles we
have purchased from the Escorts-First
Pacific combine to be complete within the next three months. All these
circles are now cash positive and generate enough to cover their debt
servicing. However we will have to infuse the funds necessary for expansion and
up gradation of the network,” says Idea Cellular chief executive officer Vikram Mehmi.
The company plans to roll out the Idea brand in all these
circles in a passed manner once a brand transition plan is developed.
“We have started integration of the acquisitions in
different functional areas like call centers and will do a best practices based
integration on a national level,” Mehmi says. To fund the Rs 2750 Millions cash price paid for the
takeover of the six cellular circles, Idea has arranged bridge financing from
lenders.
“We plan to fund the takeover cost and expansion outlay in
the Escorts circles via a mix of debt
and equity. We have already achieved financial closure for the existing
Idea circles which includes funding of
Rs 6000 Millions towards additional capacity building, upgradation of network
and IT infrastructure,” Mehmi says.
For the existing Idea circles the company has already
received the promoters equity contribution
and is drawing down on the debt component in a phased manner.
The company is expected to come out with an IPO in the next
six months as it’s also seeing an
healthy growth in its subscriber base that would entail additional
investments at the back end to support growth.
This will be crucial to the company maintaining a healthy
debt to equity ratio considering that
it already has a debt load running into thousands of crores of rupees
and will take on another Rs 8000
Millions of debt in the Escorts acquisition.
Upside for Escorts
Beleaguered Escorts which had seen repeated downgrades of
its long term credit rating since 2002
from investment grade category to junk grade in November/December 2003
may now see its credit worthiness climb
back into investment grade category after the infusion of cash from the sale
of Escotel Mobile Communications and
three circles of Escorts Telecommunications.
The company is also expected to benefit from the debt of
Escotel being taken over by Idea. Since
Escorts will also not have to make any further funds infusion into the
business it will act as a ratings
positive for the company.
The
following clause be added as clause 183 of the Articles of Association of the
company :
To comply with the licence agreements for Cellular, Basic,
Unified Access Services, International Long Distance, National Long Distance or
any business related to telephone and communication entered by the company with
the department of telecommunications and any violation of the licence agreement
shall automatically lead to the company being unable to carry on its business
in this regard.
|
Name of the company |
ESCOTEL MOBILE
COMMUNICATION LIMITED |
|
Presented By |
Mr. Satish Rajgarhia, Authorised Signtory |
|
1) Date and description of instrument creating the change |
28.06.2004, Deed of Hypothecation executed by the company
in favour of Infrastructure Development Finance Company Limited. (Hereafter
referred to as ‘the Lender’) A certified copy of the said Deed of
Hypothecation is. |
|
2) Amount secured by the charge/amount owing on the
securities of charge |
The rupee loan of Rs. 1000.000 Million agreed to be lent
and advance by the lender of the company together with interest, additional
interest, liquidated damages, cost, charges, expenses and other monies
payable by the company to the Lender on the terms, conditions and covenants
of the short Term Rupee Loan Agreement dated 28.06.2004 entered in to between
the company and the Lender (Hereafter referred to as ‘the Loan Agreement’) |
|
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 movable properties of the company
including all office equipment and furniture, vehicles, telephone and other
movable assets of whatsoever nature belonging to the company, both present
& future, whether now lying loose or incase 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 in to or upon or be
stored or be in the or about all the company factories, premises and godowns
or wherever else the same may be or be hold by any party to the order or
disposition of the company or in course or transit or on high seas or on
order or delivery, howsoever and whatsoever in the possession or addition and
the company and either by way of substitution or addition and the company
book debts, operating cash flows, bank accounts, receivable, commissions any
other revenues of whatsoever nature and where arising. All intangible assets of the company, including but not
limited to goodwill, trade mark, uncalled capital, patent, present &
future. All the right title, interest, benefits, claims and
demands whatsoever of the company in, to or in respect of the project
document including but not limited to the right to recover payments and the
benefit of all receivables or other claims of the company under or in respect
of there project document, the right to compel performance under the project
document, the right to substitute or to be substituted for the company there
under. All the right, title, interest, benefits, claims and
demands whatsoever of the company in, to under or in respect of that may be
provided by any party to the company, duly acknowledge and consented to,
where required by the relevant parties: All the right, title interest, benefits, claims and
demands whatsoever of the company in the clearances in relations to the
project and Insurance contracts/ insurance proceeds in relations to
the project. |
|
4) Gist of the terms and conditions and extent and
operation of the charge. |
The first charge operates as security, interalia, for the
due payment by the company to the lender of its Loan of Rs. 1000 Millions,
together with all with interest, additional interest, liquidated damages,
cost, charges, expenses and other monies I terms of the loan Agreement. The company has undertaken to keep the properties, goods
maintained in 3 above in marketable and good conditions at its own costs and
to insure the same in the joint names of the company and the lender. All the goods hypothecation and all realization and
insurance proceeds thereof and all document in respects of the said security
are to be kept distinguishable and held as the exclusive property of the
Lender. The security created under the said Deed of Hypothecation
is to be a continuing security. The security created under the said Deed of Hypothecation
shall rank pari passu with the security created in flavor of other Lenders. |
|
5) Name and Address and description of the person entitled
to the charge. |
Infrastructure Development Finance Company Limited, Ramon
House, 2nd Floor, 169, Backbay Reclamation, Mumbai – 400 020. |
|
6) Date and brief description of instrument modifying the
charge |
NOT APPLICABLE |
|
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. |
NOT APPLICABLE |
Particulars of Charge
Holders
|
Name of Lender |
Rupee Commitment [Rs in Millions] |
|
Industrial Development Bank of India Limited |
5500 |
|
IDBI Tower, WTC Complex, Cuffe Parade, Colaba, Mumbai –
400005 |
|
|
|
|
|
Union Bank of India |
4000 |
|
Union Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman Point,
Mumbai – 400021 |
|
|
|
|
|
Bank of Baroda |
3750 |
|
Mumbai Main Branch, 10/12, Mumbai Samachar Marg, Fort,
Mumbai – 400023 |
|
|
|
|
|
Bank of India |
3750 |
|
Bank of India Building, 70/80, M G Road, Fort, Mumbai -
400023 |
|
|
|
|
|
UTI Bank Limited |
3400 |
|
Sterling Plaza, 1262/B, Jangi Maharaj Road, Deccan
Gymkhana, Pune – 411004 |
|
|
|
|
|
Canara Bank |
3000 |
|
Warden House, Sir P. M. Road, Fort, Mumbai – 400001 |
|
|
|
|
|
UCO Bank |
3000 |
|
Mafatlal Centre, 1st Floor, Nariman Point,
Mumbai – 400021 |
|
|
|
|
|
United Bank of India |
2200 |
|
United Bank of India Building, 25, Sir Pheroze Shah, Mehta
Road, Fort, Mumbai – 400021 |
|
|
|
|
|
Dena Bank |
2200 |
|
Ashok Chambers, J M Road, Deccab Gymkhana, Pune – 411004 |
|
|
|
|
|
HDFC Bank Limited |
750 |
|
Millennium Towers, 885/1, Bhandarkar Road, Pune – 411004 |
|
|
|
|
|
Jammu and Kashmir Bank |
370 |
|
79A, Mehta House4, Bombay Samachar Marg, Fort, Mumbai – 400023 |
|
|
|
|
|
State Bank of Saurashtra |
370 |
|
17/18-A, Nariman Bhavan, Nariman Point, Mumbai – 400021 |
|
|
|
|
|
Punjab National Bank |
270 |
|
Maker Tower, E, Ground Floor, Cuffe Parade, Mumbai –
400005 |
|
|
|
|
|
Life Insurance Corporation of India |
3000 |
|
Togaksheema, Jeevan Bima Marg, Mumbai – 400021 |
|
|
|
|
|
Insurance Development Finance Company Limited |
2500 |
|
Ramon House, 169 Backbay Reclamation, Mumbai – 400020 |
|
|
|
|
|
Small Industries Development Bank of India |
1000 |
|
Mumbai Branch office, SME Development Centre, C-11, Bandra
Kurla Complex, Bandra [East] Mumbai – 400051 |
|
|
|
|
|
Export Import Bank of India |
750 |
|
Center One Building, Floor No. 21, World Trade center
Complex, Cuffe Parade, Mumbaqi - 400005 |
|
|
Total |
4224 |
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
records 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. 44.23 |
|
UK Pound |
1 |
Rs. 86.91 |
|
Euro |
1 |
Rs. 58.26 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP
CAPITAL |
1~10 |
5 |
|
OPERATING
SCALE |
1~10 |
4 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS
SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
- |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
- |
|
--CREDIT
LINES |
1~10 |
5 |
|
--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 |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER
MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
34 |
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 |
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 |