Telecom major Tata Communications clarified on Thursday that the company did not face any liquidity problems and had raised $350 million debt in the last year and had $300 million cash on its books.

Addressing the media, S Addepalli, Tata Comm senior vice-president (strategy and communications) said, "There is no liquidity or critical funding issue in the company. We have $300 million as cash on our books."

Tata Communications had approached the government, a 26 per cent partner, for changes in the shareholder agreement to raise additional funds, by relaxing the provision that capped the total indebtedness of the company vis-a-vis its networth. It had sought permission to raise debt for expansion. The government, however, sought more information regarding the financial implications of the plan.

Tata Comm also formally said that the company had dropped the option of floating a rights issue as of now and would incur a capital expenditure of $400-500 million in 2009-10. This amount excludes the provision of a war chest for the upcoming auction of WiMAX spectrum.

Addepalli said, "The company has dropped the rights issue option as of now. Equity towards the rights issue is not on the agenda. We have raised $350 million long-term debt, including bonds. Our capex in the current fiscal is $400-500 million and looking at the trend it will be the same in 2009-10."

The company had earlier approached its major stakeholders, including the government and the parent holding company, Tata Sons, for a Rs 1,000 crore (Rs 10 billion) rights issue, besides raising additional debt.

"Raising funds has been fairly easy now, we do not see any problem as far as raising funds is concerned. There has been a lot of interest from lenders towards the WiMAX auctions, so there should not be any hurdle to raising money for the auction," said Addepalli.

Commenting on the company's South African venture, Neotel, in which it holds about 56 per cent, Adepalli said the company had no intention of raising its stake.