Batelco is suing ex-partner Siva for US$184.79m, for failing to adhere to a settlement over their joint Indian venture S Tel.
S Tel was one of the mobile carriers stripped of their licences in February as a result of the 2G auction scandal.
Indian…
Batelco is suing ex-partner Siva for US$184.79m, for failing to adhere to a settlement over their joint Indian venture S Tel.
S Tel was one of the mobile carriers stripped of their licences in February as a result of the 2G auction scandal.
Indian conglomerate Siva agreed to pay back Batelco’s initial investment in the JV of US$175m in the fourth quarter of 2012, despite S Tel not being operational since its licence was revoked.
“[Batelco subsidiary] BMIC filed a claim in the UK High Court of Justice, Commercial Court against Siva and [its chairman] Chinnakannan Sivasankaran, for failing to adhere to a settlement agreement,” said Batelco in a statement to the bourse yesterday.
The case has puzzled analysts, who wonder why Siva agreed to pay back Batelco’s full investment.
“Why did Siva enter into such an agreement with Batelco? It’s a big question mark,” a telecoms analyst with close knowledge of the company told TelecomFinance.
“It is difficult to predict if Batelco will get its money back. It depends if the Indian entity has any assets. If they do succeed in getting the money, it may be later than the end of the year and be fraught with legal complications.”
Batelco sold its stake in S Tel in the last quarter of 2011 in anticipation of the 2G licence cancellation, but only announced the sale in February 2012, following the Indian government’s decision to revoke the licences.
The dispute is not expected to impact Batelco’s share price in the long term. “This will be a short-term negative for Batelco, but I don’t see any major impact,” the analyst added. “We already expected something like this would happen regarding the payment.”
