Tata Comm to speed up current projects

[Kalyan]

Tata Comm to speed up current projects

Tata Communications will step into top gear on all its ongoing projects — international as well as domestic. It was announced last year that the communications major will invest $2 bn as capital expenditure over a three year period. Tata Communications corporate strategy VP Srinivasa Addepalli said cash will not be a constraint for the company.

Over the past few months, the company has been consistently raising debt to finance its projects. In an interaction with the media, the company's management admitted that the interest burden will be a concern, but at the same time confirmed that the expansion plans will be on schedule.

Tata Communications' newly-appointed CFO Sanjay Baweja said the company's debt-to-equity ratio was less than one. "The interest cost will be a huge outgo but we will be able to handle it," he said. "For a company like ours, raising capital shouldn't be very difficult even in these market conditions," added Mr Baweja.

In November 2008, the company raised $310 million (Rs 1,562 crore) from the international and domestic market. Later, it raised Rs 250 crore through a bond issue in February 2009. As on FY08, the company's cash on the balance sheet was Rs 294 crore (consolidated) and the interest cost was Rs 175 crore. The standalone interest cost for the December 2008 quarter was Rs 34.42 crore, up from Rs 26 crore in the previous quarter.

Tata Communications has recently increased its stake in Neotel in South Africa to 56% from 26%. "We will look for similar opportunities to grow in South Asia, Middle East and other parts of Africa," said Mr Addepalli. Tata Communications has also entered into a joint venture in China to provide network security and other telecom-related solutions with CEC (China Entercom).

The company's plan to spend $400-$500 million in the current fiscal is on track and by FY09 end, the company would have spent most of it. "Connectivity requirement is on the rise and we will invest in building data cables to connect India with Europe and South Africa," he added. In mid-February, the company launched its internet data centre in Singapore, connecting Singapore to Japan via Philippines, Hong Kong and Vietnam.

source : economic times