BPL Mobile to buy out AT&T
| US firm's move to sell 49% stake in BPL Mobile Cellular may signal pullout from India |
| BPL Mobile is buying out AT&T Wireless from its 51:49 joint venture, BPL Mobile Cellular Ltd. It has simultaneously initiated discussions with a clutch of financial investors to offload equity in the company. |
| While the exact acquisition price is not known, AT&T's stake in the company has a face value of about Rs 750 crore. |
| Following the acquisition, the Indian promoter plans to make a fresh investment of Rs 500 crore and also to restructure its investor holdings. |
| Confirming the move, Sandip Basu, President & Chief Executive Officer, BPL Mobile, told Business Standard: "We are moving towards the next stage of consolidation and growth and I believe the timing of the acquisition could not have been better. The acquisition of AT&T's stake gives us the flexibility to approach financially strong investors who are committed to investing in the Indian cellular market." |
| Basu, however, did not disclose how BPL Mobile raised funds for buying AT&T out of the venture. According to AT&T sources, the exit from BPL was in line with the company's decision to focus on North America. |
| "The move is part of an ongoing plan to monetise non-North American assets," the sources said. |
| In India, the US-based telecom company has interest in Idea Cellular, a joint venture with the Tatas and Kumar Mangalam Birla, where it holds 33.33 per cent stake. |
| BPL Mobile Cellular offers services under the brand name BPL Mobile in Maharashtra, Goa, Tamil Nadu, Kerala and Pondicherry. |
| The acquisition does not have any impact on BPL's operations in Mumbai, which is joint venture with France Telecom. |
| The acquisition comes within four months of BPL tying up long-term debt for BPL Mobile Cellular. The total project cost was valued at Rs 3,248 crore. |
| The project has been funded with an equity contribution of Rs 1,489 crore by the promoters, BPL Communications and AT&T Wireless, and the balance through long-term debt of Rs 1,759 crore. |
| The company had also concluded in July this year one of the largest rupee-denominated non-recourse financing in the Indian telecom industry. |
| Basu said BPL was targeting a subscriber base of 2 million in the current financial year, Rs 1,200 crore as revenue and an operating profit of Rs 450 crore. |
| On the marketing front, BPL Mobile is rolling out intelligent network platform and installing over 200 base stations across all the four circles. |
Big plans
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First Published: Dec 04 2003 | 12:00 AM IST