Mobile operator MTS India is open to local acquisition opportunities as it looks to reduce debt via equity financing, according to strategy head Ranjan Banerjee.
Banerjee told the Economic Times that the company is willing “to tap the right…
Mobile operator MTS India is open to local acquisition opportunities as it looks to reduce debt via equity financing, according to strategy head Ranjan Banerjee.
Banerjee told the Economic Times that the company is willing “to tap the right opportunity for inorganic growth” once the government provides clarity on M&A rules, but did not elaborate.
Noting that most of the telco’s debt is provided by Chinese banks, he said it is looking at incremental funding by selling equity stakes through shareholders. He added that current loans are long-term external commercial borrowings.
A spokesman for MTS India, in which Russian conglomerate Sistema has a 74% stake, stressed that its immediate priority is to turn OIBDA positive and engage with all stakeholders, including the government, to ensure that contiguous blocks of 800 MHz spectrum are put up for auction.
“Beyond this, it is premature to talk about other possibilities, including inorganic growth opportunities,” he said.
In May, MTS India CEO Dmitry Shukov was quoted as saying the company could consider M&A opportunities in the country. Asked whether the company could be interested in rival Tata Docomo, he noted it was open to discussions but declined to comment further.
Sistema has sought the approval of India’s Foreign Investment Promotion Board to boost its stake in its local unit following the government’s decision in 2013 to remove the 74% ceiling for foreign investments in telcos.
India’s Shyam Group has a 24% stake in MTS India, while the remaining shares are held by Indian investors.
Previous reports have said MTS India was in talks with Tata Teleservices and Aircel about a three-way merger, but this has not been confirmed.
MTS India posted revenues of US$56.5m for the third quarter of 2014, up 20% year-on-year, which it attributed mainly to growth in data revenues. Its OIBDA loss for the quarter stood at US$17.1m.
Commenting on the results in late November, Shukov said: “To further strengthen the data story in India, it is imperative that the government comes out with a clear roadmap on spectrum sharing and trading.” He added that the company is optimistic that this would boost broadband penetration in the country.
India’s Department of Telecommunications recently selected a local e-auction company to carry out a multi-band spectrum auction in February 2015.
India’s four largest mobile operators – Bharti Airtel, Vodafone India, Idea Cellular and Reliance Communications – have sent a joint letter to telecoms minister Ravi Shankar Prasad asking to defer the auction until enough additional spectrum is available, local media reported in late October.
