(27 May 2009 9:15 pm)

MUMBAI: Dish TV, the leading DTH operator in India, plans to raise $150 million through foreign currency convertible bonds (FCCBs) to complete its funding requirement before it operationally breaks even.

The funding will be largely towards customer acquisition as the Subhash Chandra-owned Essel Group company targets to mop up 2.5 million subscribers in the current fiscal.

"We plan to raise $150 million via FCCBs. Along with the rights issue, this will more than take care of our funding needs till we turn cash positive," says a source in the company.

Dish TV could have gone in for a qualified institutional placement (QIP), a flavour among many Indian companies for raising funds amid a global downturn economy. "We are currently a negative networth company and couldn't have commanded a higher price. The FCCB will be good for us as the future price for the Dish TV scrip looks positive. The instrument, though, will finally depend on the prevailing market situation," says the source.

Dish TV is raising Rs 11.4 billion through a rights issue, priced at Rs 22 per share, in three tranches within 18 months. The company has already received Rs 3.1 billion in the first tranche.

The second tranche is expected in September. Dish TV promoters had to subscribe to the rights issue, lifting their stake from 57.94 per cent to 80.15 per cent, in a tough market condition that saw the scrip of the DTH company trading below the issue price fixed at Rs 22 per share.

Dish TV mopped up two million subscribers in FY'09, taking its total registered base to 5.07 million.

Shares of Dish TV closed Wednesday at Rs 47.65, up 4.5 per cent from its previous close on the BSE.

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