Asianet Satellite Communications has raised Rs 236 crores through private placement of debentures, making it the first infrastructure financial deal for a cable company. Infrastructure Development Finance Corporation (IFDC) is funding around Rs 130 crores, while Infrastructure Leasing and Financial Services (IL&FS) is putting in Rs 80 crores. The balance would come from HDFC. Asianet Satellite Communications managing director CM Radhakrishnan Nair was in Mumbai on Wednesday to sign the agreement with the financial institutions.
The financial institutions are putting in Rs 176 crores towards non-convertible debentures (NCDs) and Rs 60 crores in convertible debentures (CDs), despite their reluctance to fund cable business because of its disorganised nature.
The NCDs would be due for redemption from 2004 onwards while the CDs would be up for conversion 30 months after the date of agreement. The interest rate is pegged at 14.5 per cent.
The funding gains significance as the cable industry has found it difficult to get organised finance.
Asianet would utilise the funds to expand its cable network throughout Kerala, upgrading to fibre optics, to offer value-added services like the Internet, develop portal businesses and provide facilities for the purposes of local area and wide area networks.
Asianet Cable Vision (ACV), the cable channel arm of Asianet Satellite Communications, would also be upgraded. The company has earmarked Rs 350 crore for the total project.
Asianet is targeting a connection base of 7.5 lakh by end of March 2003. The cable network currently services 4.19 lakh connections, which it plans to increase to 6 lakh by March 31, 2002.
Asianet would undertake 700 km of underground cabling, which it would do jointly with Bharati Telecom. This would enable the company to interconnect all its headends and allow ACV to become a state channel. Besides, it can also launch a bouquet of channels.
The company has already upgraded surface cabling to fibre optic in Trivandrum, Cochi and Trichur. The next phase would cover Calicut, Kottayam and Kovalam.