The company is in advanced stages of negotiations with a clutch of banks for raising the fund. The list of banks is learnt to include BNP Paribas, Bank of Tokyo-Mitsubishi, Commerzbank, ING, Fortis and Muzuhu Corporate Bank.
The company is looking at a five-year term loan and is expected to close the financing in the next 30-45 days. The funding will most probably be in yen denominations.
When contacted a top executive of the company confirmed the development and added: "it is a routine fund-raising process". He, however, did not divulge the details stating the deal was "yet to be finalised."
According to sources close to the development, Vodafone would use the funds for expansion plans, including rolling out network infrastructure and expanding into newer cities and towns. Earlier during his visit to the country, Vodafone-Essar global Chief Executive Officer Arun Sarin said that the Indian subsidiary was looking at adding over 1.5 million subscribers a month in this financial year.
This will translate into 18 million new customers, recording a subscriber growth rate of 65 per cent per annum.
With presence in all 22 circles, Vodafone-Essar is the second largest GSM operator with a market share of 23.28 per cent and a subscriber base of around 3.56 crore as on September 30, 2007. In February this year, Vodafone acquired a 67 per cent stake in Hutchison Essar for $10.9 billion from Hong Kong-based Hutchison Telecommunications International Ltd (HTIL). The oil-to-steel conglomerate Essar holds the remaining 33 per cent in the company.
Recently, the Essar group had raised over $3.5 billion (Rs 14,000 crore) by monetising its one-third stake in Vodafone-Essar. The loan was fully underwritten by BNP Paribas, Citigroup Global Markets, Commerzbank AG and Standard Chartered Bank.
