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Siva Group to sell 6.3% stake in S Tel to Batelco

NRI investor C Sivasankaran has decided sell a 6.3% stake in the Chennai-based S Tel to the Bahrain-based Bahrain Telecommunications (Batelco). The deal size is valued at Rs 125 crore, considering that Batelco Millennium India (BMIC), a Batelco-controlled company incorporated in Mauritius, had earlier acquired a 42.7% stake in S Tel for Rs 875 crore, valuing the company over Rs 2,000 crore then. However, Batelco may have had to pay a premium for acquiring this additional 6.3% stake in S Tel.

Confirming this move, V Srinivasan, chief executive officer of the Siva Group, told ET: “It is the understanding between the Siva Group and Batelco that Batelco would be entitled to invest in S Tel up to a limit of 49%. It is clarified that it would only be by way of fresh equity investment and would be subject to Foreign Investment Promotion Board (FIPB) approval.”

Batelco, in its interim financial information for the six months ended June, has said the group subscribed to 100% of the capital of BMIC. During the period, through a series of purchases made through BMIC, the group acquired a 42.7% stake in STEL Private (S Tel), a company incorporated in India, for a consideration of $175 million (Rs 875 crore).

S Tel is part of the Siva Group — formerly Sterling Infotech Group — with a majority shareholding vesting with Skycity Foundations. Skycity, an Indian company, and Telecom Investments Mauritius (TIML) are the promoters of S Tel since inception. The Siva Group’s shareholding of Skycity and TIML reduced to 51% and 6.3%, respectively, post the investment of BMIC. BMIC holds the balance 42.7% and TMIL’s stake of 6.3% is likely to be transferred to Batelco. ET had first reported on May 2 about Siva entering the telecom ring through S Tel.

S Tel, a new telecom operator in the lndian marketplace, has acquired Unified Access Services Licenses (UASL) and spectrum to operate in six Indian circles — Orissa, Bihar, Himachal Pradesh, the North-East, Assam and J&K. These licences will enable the company to provide unified mobile service, wireless broadband and innovative value-added service (VAS), covering a population of over 226 million across these circles.

The company has also obtained ‘category A’ all-India ISP licence for providing nation-wide service.
S Tel plans to launch its mobile telephony service in India by 2009. Siva Group is a $3-billion group, with diversified business interests in sectors such as telecommunication, renewable energy, shipping, logistics, hospitality, realty, media, EPC and agro business.

Recently, S Tel has signed an end-to-end telecom infrastructure agreement for telecom towers, transmission for BTS sites and fibre backbone for inter-city connectivity with Reliance Communications. S Tel created ripples in the Indian telephoney space when it offered to pay over Rs 13,500 crore in all, for a pan-India spectrum.

Batelco is a diversified, integrated telecommunications operator with mobile, fixed and wireless broadband, datacom and fixed line services. It has operations in seven markets across the Middle East, North Africa and Asia with reported revenues of $891 million and profits of $276 million in 2008.

Source: Economic Times

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