Long Tel may divest 20% in arm to Shakti Bhog

KOLKATA: Shenzen-based Long Tel Communication Technology Ltd, a Rs 2,500-crore Chinese cellphone maker, may offload a 15-20 % minority stake in its Indian subsidiary to Shakti Bhog Foods. The stake is likely to be offered to Divyarth Health Care - a Shakti Bhog group company that distributes HTC smartphones.

The proposed equity dilution is a precursor to Long Tel’s plans to set up a state-ofthe-art cellphone manufacturing plant in the Baddi special economic zone in Himachal Pradesh next year to ramp up its OEM operations in the country.

The Chinese handset maker plans to churn out some 2 million dual SIM mobile annually in Himachal in partnership with a local JV partner. The mobile phones will be sold to a clutch of domestic brand distributors.

Romi Thapar, who heads Long Tel’s India operations, confirmed that the company is in talks to bring in a Shakti Bhog Foods group company as a possible minority partner, but declined to share deal commercials.

“Long Tel is looking to expand its OEM lines in India and we are in talks with a ShaktiBhogFoodssubsidiary, Divyarth Health Care, to offload a minority stake. I cannot share commercials as there is no final decision yet,” Thapar told ET. Long Tel’s bid to explore an equity partnership with a Shakti Bhog Foods subsidiary stems from “Divyarth’s experience as a distributor of PDAs for HTC,” added Thapar.

“Long Tel is also in exploratory talks with the Himachal Pradesh government to acquire roughly 2.5 acres in the Baddi SEZ to set up a cellphone manufacturing plant that will primarily cater to our OEM business in India. A final decision will be taken by March 2011 once we take a call on our local JV partner ,” he added .

At present, Long Tel does OEM work for a clutch of Indian mobile brand distributors like Funny , Movil and Sunsky. For this, the Chinese telco ships roughly 1.5 million dual SIM handsets annually from its manufacturing facility in Shenzhen to the India market. “