Search This Blog

July 10, 2013

Telecom commission puts off divestment plans in TCIL

KOLKATA: The Telecom Commission has postponed the divestment plans in Telecommunications Consultants India (TCIL) as it is actively considering the proposals to raise cash by exiting Bharti Hexacom — in which TCIL holds 30% — a top TCIL executive told ET.


The Telecom Commission is the highest decision-making body in the communications ministry. Bharti Hexacom, a subsidiary of Bharti AirtelBSE 7.30 %, runs mobile operations in Rajasthan and Northeast (excluding Assam).

A TCIL board member said the state-run company's "share in Bharti Hexacom is worth about Rs 1,400 crore", which values Hexacom at roughly Rs 4,700 crore.

"The Telecom Commission is open to TCIL's proposal to exit Bharti Hexacom, which is why there is no decision on the disinvestment yet," said the official quoted above. In the event of a favourable Telecom Commission decision, the Sunil Mittal-founded Bharti Group will have the right of first refusal to TCIL's stake in Hexacom.

The telecom department had earlier shelved TCIL's proposed exit from Hexacom, following which the public sector company was left with no option but to explore the disinvestment of 10% to raise money for its capital expenditure needs.

TCIL is likely to shortly engage consultants to set a fresh reserve price of its 30% stake in Bharti Hexacom, which has nearly 18 million customers in Rajasthan and Northeast. Hexacom has over 30% of the Rajasthan market.

When TCIL had originally proposed to exit Hexacom two years ago, consultant Deloitte had fixed the base price of its 30% stake at Rs 1,800 crore, which was then deemed "too low" by several members of Parliament and independent agencies, said an official with direct knowledge.

The stake sale was subsequently put on hold in 2011 when then cabinet secretary KM Chandrasekhar asked the communications ministry to re-evaluate the base price.

In fact, TCIL's exit plans from Hexacom were shelved since the Bharti Group was also unwilling to pay the premium being demanded by the government over and above the Rs 1,800 crore base price.

Bharti had withdrawn its bid to buy back TCIL's 30% stake in Hexacom, citing delays in the sale process. Another TCIL board member claimed that the Hexacom stake sale was primarily put off two years ago due to unfavourable market conditions.

"The situation has changed for the better, which is why, the Telecom Commission is once again open to TCIL's exit from the Bharti subsidiary if government gets the right price," he said.

indiatimes.com 

No comments:

Post a Comment