Pvt players can refinance 3G debt through ECBs

The ministry said the decision has been taken keeping in view the short window available between the date of application for the auction and the date of payment,due to which bidders find it difficult to make payments through external commercial borrowings ECB. However,the ministry said,the ECB will have to be raised within 12 months from the date of payment of final installment to the government and domestic banks would not be allowed to provide any guarantee. Experts said the move would help the bidders in availing money at cheaper rates. The telcoms would be able to replace short-term borrowings by lon-term ECBs. Basically,the government is trying to ensure that funding doesnt become a problem in 3G auction, Jayesh Desai,National leader infrastructure,real estate and government services,Eamp;Y said. At present,a successful bidder of 3G auction has to pay 25 per cent of the bid amount within 5 days of the close of the auction and the balance amount within 15 days of the auction closure.

The move is expected to provide huge relief to telecos as they can now raise cheaper foreign debts at a later date. It would help the telecom companies,planning to bid,in rescheduling the payment. The government had earlier eased the ECB guidelines allowing telcos to raise funds abroad for participating in the 3G auction.