Tata Comm faces liquidity crisis,reaches govt for help

Facing a severe liquidity crisis and the possibility of breaching long-term loan covenants,Tata Communications has approached the government...

Written by Press Trust Of India | New Delhi | Published: January 19, 2009 12:29 am

Facing a severe liquidity crisis and the possibility of breaching long-term loan covenants,Tata Communications has approached the government,which is a 26 per cent partner in erstwhile VSNL,for changes in shareholders agreement to raise additional funds.

The company has requested the Department of Telecom (DoT) to consider relaxation of the provisions that puts a cap on the total indebtedness of the company vis-à-vis its networth,a move that would allow Tata Communications to raise additional funds,sources in the DoT said.

When contacted,a company spokesperson said,“Tata Communications’ financial health continues to remain sound; it does not face any liquidity crunch in managing its business operations.”

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