US private equity firm Providence Equity Partners is considering selling its 9.99% stake in cellco Idea Cellular, according to the Business Standard.
In 2006, the PE firm bought a 16% stake in Idea through its investment arm P5 Asia Investments…
US private equity firm Providence Equity Partners is considering selling its 9.99% stake in cellco Idea Cellular, according to the Business Standard.
In 2006, the PE firm bought a 16% stake in Idea through its investment arm P5 Asia Investments (Mauritius) for US$400m. It then gradually cut its stake in the company to about 10%.
Providence’s current interest is now valued at approximately Rs26bn (US$580m) based on Idea’s market cap on 12 July 2011.
The country’s number three mobile operator, Idea Cellular has over 86 million subscribers. Providence could not be reached for comment before the press deadline. Idea declined to comment.
This report comes shortly after The Delhi High Court refused to transfer six overlapping licences from Spice to Idea until the DoT gave its approval.
In 2008, Idea acquired a 41.1% stake in rival Spice Communications. But under local shareholding laws, a company is not allowed to hold more than a 10% stake in another cellco operating in the same regions in order to avoid overlapping licences.
In separate news, the Central Bureau of Investigation (CBI) has reportedly closed its investigation into Idea after finding that the company had not committed any wrongdoing when it was allocated 2G spectrum in 2008
