Feb 08 2012 |
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UPDATE: Batelco To Sell STel Stake To India's Sky City Foundation
Wednesday, Feb 08, 2012
--To sell 42.7% stake in India's STel to Sky City Foundation for $175 million
--Expects sale to be completed by fourth quarter of this year
--Disposal comes amid Indian investigation into the award of 2G licenses
By Tim Falconer
DUBAI (Zawya Dow Jones)--Bahrain's Batelco, the country's biggest telecom operator, has signed an agreement to sell its 42.7% stake in India's STel to Sky City Foundation for 65.8 million Bahraini dinars ($175 million), exiting its investment in the South Asian country at a time when the mobile phone industry there is undergoing a far reaching investigation into the award of 2G licenses.
The sale is expected to be completed by the fourth quarter of this year, Batelco said in an emailed statement. The telecoms firm had decided in April 2011 to actively pursue a disposal of its investment.
News of the sale comes after India's Supreme Court last week cancelled all mobile-telecom-service licenses issued without auction after January 2008, raising uncertainty over billions of dollars that international companies have invested in the South Asian nation.
"As Batelco continues to grow and diversify its operations, we remain interested in other investment opportunities for the Batelco Group, that will enable us to participate in the Indian telecom market," said Shaikh Mohamed Bin Isa Al Khalifa, Batelco Group's chief executive officer. "We are actively exploring all options in this respect over the coming months," he added.
Batelco said last week that it, STel management, other STel shareholders and legal advisers were all carefully studying the detailed judgement handed down by the Supreme Court of India that cancelled 2G licences issued in 2008 and allocated spectrum granted to operators including STel.
Gulf telcos such as Batelco and U.A.E.'s Emirates Telecommunications Corp., or Etisalat, had bought stakes in companies that got licenses in 2008 as India presented a major growth market for them.
The Indian court ruling, which comes on complaints of corruption in the license allotment, has raised concerns about the foreign investment climate in India, Asia's third-largest economy.
Batelco shares closed trading Wednesday flat at BHD0.39.
-By Tim Falconer, Dow Jones Newswires; +9714 446-1690; tim.falconer@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
08-02-12 1224GMT
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