By Elizabeth Broomhall
Bahrain’s biggest telecoms company said it would sell its 42.7 percent stake to Sky City Foundation Limited
Batelco Group, Bahrain’s biggest telecoms company, has signed an agreement to sell its 42.7 percent share in Indian mobile phone operator STel following a court decision to revoke the 122 licenses in the country.
The company announced plans to complete the sale to Indian firm Sky City Foundation Limited at the end of October this year, allowing it to focus on more profitable investment opportunities.
“BMIC Limited, a 100 percent Batelco owned subsidiary, entered into an agreement, in the fourth quarter of 2011 to sell its 42.7 percent equity in STel for BD65.8m [$174.5m] to its Indian partner, Sky City Foundation Limited,” said the firm’s CEO, Shaikh Mohamed bin Isa Al Khalifa.
“As Batelco continues to grow and diversify its operations, we remain interested in other investment opportunities for the Batelco Group that will enable us to participate in the Indian telecom market. We are actively exploring all options in this respect over the coming months.”
The decision by India's Supreme Court to cancel 122 second generation, 2G, mobile licences earlier this month came as a shock to the Gulf telecoms industry, and was viewed as one of the biggest scandals in India.
The move was also perceived as a setback for Prime Minister Manmohan Singh's government, which oversaw the sale of the licenses in 2008, well below-market prices.
Other companies affected included Unitech Wireless, the Indian joint venture of Norway's Telenor and Unitech, and Etisalat DB, the joint venture between Abu Dhabi's Etisalat and India's DB group.
According to the statement, Batelco had decided as early as April last year to sell its Indian shareholding, and had made this clear in its financial accounts.
The company had acquired the 42.7 percent equity in STel via two transactions in May and June 2009 for a total of $174.5m.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.