Packer firms allotted shares in HFCL

By Our Special Correspondent

NEW DELHI, APRIL 10. The board of Himachal Futuristic Communications Ltd. (HFCL) today allotted 15.76 lakh shares worth Rs. 228.63 crores to a company fully owned by the Australian media mogul Mr. Kerry Packer. The allotment is part of a deal signed in March under which the Packer group will pick up 10 per cent stake in HFCL for Rs. 1,000 crores and form minority joint ventures in the upper-end of the IT sector.

While shares worth Rs. 228 crores are being issued to `Ecom.com' under the automatic approval route, the balance of 55 lakh shares amounting to over Rs. 810 crores will be made to another Packer company after Government approval has been obtained. The need to seek the approval arose after the March 22 Reserve Bank of India circular which stipulates clearance for foreign direct investment of over Rs. 600 crores. This clause was not there when the agreement was struck to transfer Rs. 1,039 crores ($238 millions) in additional equity from HFCL to Packer group companies.

The Packer group has called the deal ``the most significant investment made in Asia'' and is stated to be the largest FDI in an Indian telecom company. In addition to infusion of equity in HFCL, two joint ventures have also been planned. HFCL will hold 51 per cent of the equity, CPH 30 per cent and the balance 19 per cent by strategic investors in the first JV which will develop software products and services. The second JV, with identical equity holding pattern, will invest in creating and developing network infrastructure to provide solutions and services for specific business areas. The initial investment will be Rs. 100 crores each with the debt equity ratio at 1:1.

The Rs. 1,039 crores from the Packer group is in addition to Rs. 735 crores garnered by HFCL through private placement last month. The proceeds are expected to be utilised for retiring the company's debt and offer supplier's credit to companies ordering HFCL's telecom equipment. The company might utilise the funds to take over a couple of private companies offering phone services.

The HFCL's board also approved payment of interim dividend at the rate of 25 per cent and fixed May 10 as the record date for payment of interim dividend.

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Section  : Business
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