Essar may not have to sell BPL after all: CNBC-TV18

Essar may not have to sell BPL Communication, after all. The deal has been so structured that Essar can keep running it at least for a while without flouting any rules, says CNBC-TV18.
Essar is in no hurry to sell BPL mobile. And it is under no regulatory obligation to do so anyway. It has worked its way around the regulations.

Essar's telecom arm Essar Teleholdings holds only 9.9 per cent in BPL directly.

Out of the rest, an investment company, Capital Global, holds 16.1 per cent and BPL Communications holds 74 per cent. Essar refused to divulge details about the shareholders of these companies.

The telecom policy states that a company cannot have stake in two competing ventures. But it can hold up to 9.9 per cent in a second company that will be treated as a financial investment.

So Essar, which already has 33 per cent in the Hutchison Essar joint venture, can hold 9.9 per cent in BPL Communication.

Earlier this year Essar bought BPL to merge it with Hutchison Essar. But since regulatory approvals did not come, it ended the agreement to merge BPL into the Hutch Essar joint venture and the two parties ended up in court.

Subsequently, Hutch got intra-circle merger approvals, but Essar refused to revive the deal. Even now as the two struggle to reach a solution, Essar wants to invest a $100 million to get BPL going again.