BSNL cool to Zain acquisition: Goyal
03 December 2009
Government-run telecom operator Bharat Sanchar Nigam Ltd said on Wednesday that it has put its proposed acquisition of a stake in Kuwait's Zain Telecom ''on hold'', as it has not got the information it sought from the New Delhi-based Vavasi Group, which is leading the bid to acquire Zain.
"We had sought some information from Vavasi about the company itself, which we have not got. To that extent it can be implied that the acquisition of Zain Telecom is on hold," BSNL chairman and managing director Kuldeep Goyal told newspersons in New Delhi on Wednesday.
Asked if BSNL is looking to approach Zain Telecom directly, he said, "Nothing like that at the moment." Goyal was speaking on the sidelines of a function to announce a partnership with UK telecom major BT Group Plc.
BSNL has been eyeing Zain since the last few months, and had sought to rope in Mahanagar Telephone Nigam Ltd – the other state-run telco – for a joint bid to acquire a controlling stake in Kuwait's biggest phone company. But by October, the two Indian companies had more or less dropped the idea because it would mean partnering with the little-known Vasavi Group, whose antecedents are considered somewhat suspect.
Vavasi claims to have diversified interests, including telecommunications and renewable energy. It is in exclusive talks with Zain to acquire around 46 per cent for $13.7 billion (Rs65,000 crore). But investigations by the two telcos showed that Vavasi had not paid its employees for several months, had no revenue streams and had a share capital of just Rs5 lakh.
Vavasi, which has already roped in Malaysian billionaire Syed Mokhtar al-Bukhary, had gone ahead and announced that it had roped in the two public sector telecom operators to join the consortium, but the Indian operators had all along denied that they had signed up for the proposed deal.