In order to continue with its aggressive expansion planning, country’s fixed line and broadband operator, Tata Communications (formerly VSNL) has approached the government, a 26 per cent shareholder, for a rights issue to raise Rs 1,000 crore and another Rs 2,000 crore through debt to finance acquisitions in the US and the UK and bid for spectrum for wireless broadband.

It is believed that the operator is trying its best to raise equity since early last year, yet, the state has not approved any of the company’s previous proposals.

Company sources informed that Tata Communications is planning to deploy part of the funds for its new submarine cable projects and possible acquisitions in the managed services space, indicating that a few targets in the US and the UK are being evaluated in the wake of their lower valuations.

The company is also expected to bid for Indian WiMAX spectrum when it is finally auctioned in the first half of 2009.

However, the company has so far declined to give any details of the target companies.