Bahrain Telecom, a shareholder in new operator STel whose licences have been cancelled by the Supreme Court last week, became the first global firm to exit the Indian telecom market by selling its nearly 43 per cent stake for $175 million.
Reacting to the development, STel said Bahrain Telecom (Batelco) was "very uneasy" in India and expressed the wish to sell its stake. "The telecom sector, particularly for the new operators, over the last two years has become like a badly- planned hurdle race," an STel spokesperson said.
Batelco had acquired 42.7 per cent stake in STel via two transactions in May and June 2009 for a total of $174.5 million. In a statement it said the decision to sell was a "part of an earlier understanding with Indian partner to exit, given the circumstances surrounding the 2G probe in India over the past 12 months".
"BMIC Limited, a 100 per cent Batelco-owned subsidiary company, entered into an agreement, in the fourth quarter of 2011 to sell its 42.7 per cent stake in STel for $174.5 million to its Indian partner, Sky City Foundation Limited," Batelco's Group Chief Executive Shaikh Mohamed bin Isa Al Khalifa said in a statement.
The agreed time-frame for completion of the sale is the end of October, 2012.
Commenting on Batelco's exit, the STel spokesperson further said, "This is true even as per their stock exchange disclosures as early as June 2011 when they had already classified S Tel shares as 'assets for sale' in their books.
"Subsequently, Siva Group and Batelco discussed the way forward and Batelco agreed to sell their shares and exit. On or around October 2011, the Siva Group offered to purchase the shares and also sought a year's time to consummate this transaction."
The one year time was to look for an alternate investor or if everything goes well, Siva Group itself to repurchase the BMIC stake in STel, he added. .