MTNL close to buying Suntel
ACQUISITION: In what could be its first acquisition, state-run
telecom firm MTNL is close to buying Sri Lankan fixed line operator
Suntel and has sent a high-level delegation to start technical
assessment of the company.
A delegation has left for Sri Lanka to hold discussions with Suntel
on technical assessment, which is a prerequisite to formalise the deal,
company sources said.
The delegation will be in Sri Lanka for four days to conduct due
diligence along with Suntel officials, they said.
MTNL is believed to have emerged as the highest bidder for Suntel
with a bid of between $ 160-180 million. If the deal goes through, this
will be the NYSE-listed Indian company's first acquisition. It will also
give MTNL a foothold in Sri Lanka's fast-growing telecom market.
The Colombo-based company offers fixed line service on CDMA based
technology's WLL platform. All its key shareholders want to exit,
sources said. Nordic company Telia AB is Suntel's top shareholder with
55% stake through its holding firm Overseas Telecom AB.
The remaining stake is held by Sri Lanka's Metrocorp, the National
Development Bank of Sri Lanka, Townsend Ltd of Hong Kong and
International Finance Corporation.
MTNL, which has been trying to grow business beyond Delhi and Mumbai,
had in March lost the race for Saudi Arabia's third mobile licence and
fixed line licence in April.
It had also lost a bid for a licence in Kenya. But it has a licence
to offer fixed line, cellular and ILD services in Mauritius.
(Times of India)