FIPB clears Aditya Birla telecom's foreign equity proposal
The Foreign Investment Promotion Board today cleared the Aditya Birla Telecom's proposal to infuse foreign equity amounting to $640 million by issue of compulsorily convertible preference shares.
By PTI |
NEW DELHI: The Foreign Investment Promotion Board today cleared the Aditya Birla Telecom's proposal to infuse foreign equity amounting to $640 million by issue of compulsorily convertible preference shares.
The proposal now will go to the Finance Minister for his approval. FIPB in the last meeting had deferred a decision in view of concerns over indirect foreign equity in the company. Idea Cellular, which owns ABTL, has 44.76 per cent foreign holding at present.
Although ABTL plan is for induction of 20 per cent foreign equity, the company has sought FIPB permission for FDI up to 74 per cent - the ceiling for telecom sector.
ABTL holds telecom licence for Bihar and Jharkhand. The company has proposed issue of 2.5 million compulsorily convertible preference shares to global PE firm Providence Equity Partners or its permitted assignees.
The investment is to be routed through P5 Asia Holding Investments, registered in Mauritius. ABTL filed an application with FIPB on June 4 to seek permission for bringing in investment of $640 million (Rs 2,700 crore).
The FDI policy allows foreign investment up to 74 per cent in telecom companies.
The proposal now will go to the Finance Minister for his approval. FIPB in the last meeting had deferred a decision in view of concerns over indirect foreign equity in the company. Idea Cellular, which owns ABTL, has 44.76 per cent foreign holding at present.
Although ABTL plan is for induction of 20 per cent foreign equity, the company has sought FIPB permission for FDI up to 74 per cent - the ceiling for telecom sector.
ABTL holds telecom licence for Bihar and Jharkhand. The company has proposed issue of 2.5 million compulsorily convertible preference shares to global PE firm Providence Equity Partners or its permitted assignees.
The investment is to be routed through P5 Asia Holding Investments, registered in Mauritius. ABTL filed an application with FIPB on June 4 to seek permission for bringing in investment of $640 million (Rs 2,700 crore).
The FDI policy allows foreign investment up to 74 per cent in telecom companies.
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However, this takes into account indirect FDI as well. Therefore, no telecom company can have FDI up to 74 per cent if its parent company has FDI. Start a SIP with as low as ₹500 with ET Money App!
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