State-owned Telecom Consultants of India (TCIL) has decided to suspend the sale of its 30% stake in mobile JV Bharti Hexacom because of the company’s strong performance, according to reports.
For years, the government has been looking to exit the…
State-owned Telecom Consultants of India (TCIL) has decided to suspend the sale of its 30% stake in mobile JV Bharti Hexacom because of the company’s strong performance, according to reports.
For years, the government has been looking to exit the company, in which Bharti Airtel is another investor.
TCIL first sought dividends from Hexacom in 2004, when it began to generate profits. But Bharti repeatedly refused to do so, saying all of Hexacom’s revenues were reinvested to expand in the market and keep up with the competition.
In September last year, Bharti and construction group Punj Lloyd both expressed their interest in TCIL’s stake. A number of local and foreign companies were also looking to bid, it was reported at the time.
But in March, Airtel and Punj Lloyd decided against renewing their bids, saying that the sale process took longer than expected.
Shortly after, the cabinet secretary decided to put the sale process on hold following claims that the stake had been undervalued, local reports wrote. Consultancy firm Deloitte had set a base price of Rs18bn (US$395m), with Hexacom having a turnover of over Rs17bn (US$374m) and profits of over Rs4bn (US$88m) last year.
More recently, in mid-July, Bharti Airtel offered to list a stake in Hexacom in order to allow TCIL to exit the business.
But recently improved performance and potentially more attractive valuations following the introduction of 3G have reportedly encouraged TCIL to postpone the sale.
The company could not be reached for comment before the press deadline.
