American Tower Co gets FIPB nod for 100% arm

The Foreign Investment Promotion Board (FIPB) is understood to have cleared American Tower Co's proposal to set up a wholly-owned subsidiary, but with a rider that the firm would have to dilute 26 per cent stake to Indian public within next five years.

FIPB in its meeting on December 8 cleared the proposal, following the recommendation of the department of telecom with the divestment clause, official sources said.

Through the proposed subsidiary, the US-based owner and operator of communication sites, hopes to strengthen its presence in the world's fastest growing mobile market.

Boston-based ATC is acquiring 100 per cent stake in the existing Indian venture - ATC Tower Co of India Ltd - buying out the individual resident investor.

At present, ATC has 48.78 per cent stake in ATC India, while the individual investor holds 51.22 per cent. The divestment clause, which was invoked in case of Coca-Cola years ago, is applicable for ATC as well.

It is subject to the clause that the company would have to divest 26 per cent stake in favour of Indian public, if the investor is listed in other parts of the world. As ATC is listed on NYSE, the clause will be applicable on it.

The US company is in talks with Reliance Communications, for a stake in its tower venture. RCL is hiving off its 15,000 CDMA and GSM towers into a separate company and ATC is likely to take 5-15 per cent stake, sources said.