Subscribe to BCA Journal Know More

January 2013

A. P. (DIR Series) Circular No. 54 dated 26th November, 2012 External Commercial Borrowings (ECB) Policy for 2G spectrum allocation

By Gaurang Gandhi, Chartered Accountant
Reading Time 2 mins
fiogf49gjkf0d
This circular contains the revised guidelines for availing ECB up to INR46,414 million per company per financial year under the automatic route by successful bidders in the 2G Spectrum auction: –

(i) Refinancing of Rupee resources

Successful bidders who have made upfront payment for the award of 2G spectrum initially out of Rupee loans availed of from the domestic lenders are eligible to refinance such Rupee loans with a long-term ECB within a period of 18 months from the date of sanction of such Rupee loans for the stated purpose from the domestic lenders after showing proof of upfront payment to the bank.

(ii) Relaxation in ECB-liability ratio and percentage of shareholding

Successful bidders are permitted to avail of ECB from their ultimate parent company without any maximum ECB liability-equity ratio, if the lender holds minimum paid-up equity of 25% in the borrower company, either directly or indirectly.

(iii) Bridge Finance facility

Successful bidders can avail of short term foreign currency loan in the nature of bridge finance under the ‘automatic route’ for the purpose of making upfront payment towards 2G spectrum allocation and replace the same with a long term ECB provided the long term ECB is raised within a period of 18 months from the date of drawdown of bridge finance.

Download PDF

You May Also Like

A. P. (DIR Series) Circular No. 52 dated 20th November, 2012 Export of Goods and Software – Realisation and Repatriation of export proceeds – Liberalisation

A. P. (DIR Series) Circular No. 55 dated 26th November, 2012