Bahrain Telecom became the first global firm to exit the Indian telecom market by selling its nearly 43% stake in new operator STel for USD 175 million.
Bahrain Telecom, a shareholder in new operator STel whose licences have been cancelled by the Supreme Court last week, became the first global firm to exit the Indian telecom market by selling its nearly 43% stake for USD 175 million.
Reacting to the development, STel said Bahrain Telecom (Batelco) was "very uneasy" in India and expressed the wish to sell its stake. "The telecom sector, particularly for the new operators, over the last two years has become like a badly-planned hurdle race," an STel spokesperson said.
Batelco had acquired 42.7% stake in STel via two transactions in May and June 2009 for a total of USD 174.5 million.
In a statement it said the decision to sell was a "part of an earlier understanding with Indian partner to exit, given the circumstances surrounding the 2G probe in India over the past 12 months". "BMIC Limited, a 100% Batelco-owned subsidiary company, entered into an agreement, in the fourth quarter of 2011 to sell its 42.7% stake in STel for USD 174.5 million to its Indian partner, Sky City Foundation Limited," Batelco's Group Chief Executive Shaikh Mohamed bin Isa Al Khalifa said in a statement. The agreed time-frame for completion of the sale is the end of October, 2012.
Commenting on Batelco's exit, the STel spokesperson further said, "This is true even as per their stock exchange disclosures as early as June 2011 when they had already classified S Tel shares as 'assets for sale' in their books. "Subsequently, Siva Group and Batelco discussed the way forward and Batelco agreed to sell their shares and exit.
On or around October 2011, the Siva Group offered to purchase the shares and also sought a year's time to consummate this transaction." The one year time was to look for an alternate investor or if everything goes well, Siva Group itself to repurchase the BMIC stake in S Tel, he added.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.