Moto deal: Videocon may have to raise finance overseas

By Sujata Goel, CNBC-TV18

Videocon is looking to enter telecom in a big way. They have applied for licenses on the service side. They are also a consumer durable company. So, it makes sense for them to go and pay for it.

Motorola’s handset business is valued between USD 2 billion and USD 3.8 billion by various agencies. So, Videocon may have to raise finances overseas. Chairman Venugopal Dhoot said that they had Rs 2,000 crore of excess cash sitting on their balance sheet.

Also, there were some international bankers though he did not say who they were. He said that they were helping him raise this money internationally and make the bid. Industry experts say that Motorola’s handset business is also very attractive to a lot of handset manufacturers, maybe say a Nokia or Sony Ericsson, because they have reasonably good design and R&D capabilities. That would be something that other handset manufacturers would also look at.

At this point the only thing that is known is that Videocon is looking at making a bid. As of now, it has only given in an expression of interest. The bid documents are still not out and we still do not formally know whether Motorola has put its handset business on sale.