Vodafone prepares USUSD2B loan in India
Vodafone Essar, the UK-based group’s Indian subsidiary, is in the process of a raising a INR100 billion (USD2 billion) bridge loan to finance its participation in India’s forthcoming 3G spectrum auctions. According to banking sources, Vodafone has appointed SBI Capital Markets to arrange the loan from a range of banks. “Canara Bank has approved INR7.5 billion for Vodafone, and the rest of the money will come from other banks,” a source said. An unnamed Vodafone source added that the financing would also be used for network expansion. However, Vodafone Essar declined to offcially comment on the story.
According to the report, there is still no official date for the start of India’s long-awaited 3G auctions, which are now thought unlikely to happen prior to India’s general elections, which need to take place before May. A Mumbai-based telecom analyst added that Vodafone would have little trouble raising the INR100 billion, suggesting that the operator should be able to secure an interest rate of around 8.5 percent. India is a key market for Vodafone, accounting for around 65 percent of the 9.7 million net new customers it added in its most recent.