Mumbai: The Birla Tata and AT&T combine, the new cellular giant, has deferred its initial public offering (IPO) of shares pending completion of the merger. The three had decided to merge with each other early this year and have only recently decided to name the new entity as Birla Tata AT&T Ltd.

The company has also decided on a new brand, the name of which, however, has not been disclosed yet. The decision to defer the IPO has been taken till such time RPG Telecom, the four special purpose vehicles (SPVs) and BPLs mobile business are merged with the new entity.

The merger of RPG Telecom and the SPVs is likely to take about in six months. The Birla Tata and AT&T combine had created four SPVs to take over the business of RPG Telecom in order to address concerns raised by lenders.

The merger process will consolidate the existing separate loans into one and the terms of the loans aligned to the new company. Birla AT&T had, in fact, decided on their IPO way back in February 2000, but had called it off following its decision to merge with Tata Cellular.

The new company, meanwhile, has seized the opportunity of the ongoing low interest rate regime and has decided to prune down its interest cost by renegotiating the terms of its existing loans and a possible swap of high cost loans with low cost ones. The companys rupee loans were taken way back in 1997, which were then available at 17 to 18 per cent.

Interest rates have, since then, fallen substantially and the prime-lending rate currently is placed at around 11.50 per cent. The companys total debt stands at Rs 2,000 crore and a saving of even 3 per cent annually would mean reducing interest outgoings by Rs 60 crore.

The debt comprises of a dollar loan of $120 million and a rupee loan in the order of Rs 1,500 crore, of which Rs 400 crore is of short tenure. The rupee loan includes a loan of Rs 500 crore from IDFC and Deutsche Bank, taken to acquire RPG Telecom.