Norway’s Telenor ASA has sought one-time relaxation in the external commercial borrowing (ECB) norms for giving a loan of up to $2 billion to its cash-strapped Indian venture.
The Nordic telecom major has written to the Finance Ministry seeking a waiver on ECB guidelines, including end-use restrictions.
For operational expenses
Under the ECB norms, there are various restrictions related to use of the money raised for repayment of rupee loans, operational expenditure and working capital requirements.
According to an internal note of the Department of Economic Affairs (DEA) seen by
In addition the company has indicated to the Department that it intends to participate in the upcoming spectrum auction through a new company, provided the auction rules are commercially sustainable.
When contacted, a Telenor spokesperson said the company was facing a challenging situation with no banks willing to lend.
“We continue to explore all available financing options and have therefore approached the Indian Government about the use of ECBs,” said Mr Tor Odland, Vice-President, Group Communications.
Though the company said that it has not specified any amount to the Government, the DEA note said that Telenor has sought permission to provide ECB in excess of $750 million in a financial year to the Indian venture.
“Telenor intends to provide shareholders loan to the (Indian) company and new company for an amount of up to $2 billion. The amount may be needed for payment of spectrum fee to the Government in the upcoming 2G auction,” said the note.
The Nordic company also wants permission for the Indian venture to prepay the loan without seeking additional approval from the Reserve Bank of India.