Essar may not have to sell BPL after all: CNBC-TV18
08 Sep 2006
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.
