Foreign Investment Promotion Board (FIPB) is understood to have cleared the proposal of American Tower Company (ATC) to set up a wholly-owned subsidiary but with a rider that the firm would have to dilute 26% stake to the Indian public within the next five years.The board, at its meeting on December 8, cleared the proposal following the recommendation of the Department of Telecom with the divestment clause, official sources said.The US-based owner and operator of communication sites hopes to strengthen its presence in the world's fastest growing mobile market through the proposed subsidiary.Boston-based ATC is acquiring 100% stake in the existing Indian venture, ATC Tower Company of India, buying out the individual resident investor. At present, ATC holds 48.78% stake in ATC India, while the individual investor holds 51.22%.The divestment clause subjects a company to divest 26% stake in favour of the Indian public if it is listed in other parts of the world. As ATC is listed on NYSE, the clause will be applicable on it.ATC is a Infrastructure Category-I provider, where 100% foreign direct investment (FDI) is allowed by the government. While FDI up to 49% is under automatic route, it was essential for the company to get FIPB approval for increasing stake.The US company is in talks with Anil Ambani group firm Reliance Communications (Rel Comm) for a stake in its tower venture. Rel Comm is hiving off its 15,000 CDMA and GSM towers into a separate company, and ATC is likely to take 5-15%equity, sources said.
