MTNL puts conditions for Suntel buy-out
MTNL, which is in detailed negotiations to acquire fixed wireless operator Suntel, has put conditions for the buy-out as it tries to cash in on legal cases the Sri Lankan firm is involved in.
By PTI |
NEW DELHI: State-run MTNL, which is in detailed negotiations to acquire fixed wireless operator Suntel, has put conditions for the buy-out as it tries to cash in on legal cases the Sri Lankan firm is involved in.
"We are the preferred bidder and are working hard at it. During our discussions with Suntel, we have put forward several conditions," said a senior MTNL official without disclosing the conditions.
Industry sources said the conditions are attached to the legal cases Suntel is involved in with a customer. The case may have a bearing on Suntel's valuation, which MTNL is trying to cash in on.
The official declined to put a timeframe on when it would be in a position to finally clinch the deal.
It is a very long process, the details of the purchase are being discussed at present and MTNL cannot take any chances since it is a big transaction and the company is a listed PSU.
Therefore, putting a timeframe is difficult, said the official. Two other companies are also in the fray to acquire Suntel.
MTNL, which is believed to have submitted the bid to acquire the Sri Lankan fixed-line wireless operator in the range of USD 100-120 million, has factored in a legal case involving a claim of four billion Sri Lankan rupees (LKR) against Suntel.
If MTNL acquires the company it will have a local partner.
Suntel, a privately-owned telecom operator, has three lakh subscribers and has NLD and ILD licences. The acquisition would give MTNL leverage on data services, fixed line and a host of corporate and SME customers.
MTNL also operates in Nepal and the Maldives. Its medium-term debentures are listed on the Colombo Stock Exchange.
Suntel posted a net profit of LKR 311 million for the first half ending June 2007. Revenue rose to LKR 3.6 billion from LKR 3.3 billion in the first half of 2006.
"We are the preferred bidder and are working hard at it. During our discussions with Suntel, we have put forward several conditions," said a senior MTNL official without disclosing the conditions.
Industry sources said the conditions are attached to the legal cases Suntel is involved in with a customer. The case may have a bearing on Suntel's valuation, which MTNL is trying to cash in on.
The official declined to put a timeframe on when it would be in a position to finally clinch the deal.
It is a very long process, the details of the purchase are being discussed at present and MTNL cannot take any chances since it is a big transaction and the company is a listed PSU.
Therefore, putting a timeframe is difficult, said the official. Two other companies are also in the fray to acquire Suntel.
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MTNL, which is believed to have submitted the bid to acquire the Sri Lankan fixed-line wireless operator in the range of USD 100-120 million, has factored in a legal case involving a claim of four billion Sri Lankan rupees (LKR) against Suntel.
If MTNL acquires the company it will have a local partner.
Suntel, a privately-owned telecom operator, has three lakh subscribers and has NLD and ILD licences. The acquisition would give MTNL leverage on data services, fixed line and a host of corporate and SME customers.
MTNL also operates in Nepal and the Maldives. Its medium-term debentures are listed on the Colombo Stock Exchange.
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Suntel has filed a petition against Electrotek Network Services to recover LKR 69.3 million for telecom services rendered to the company, but faced a counter suit of over LKR 4 billion for terminating the service. The cases are on trial.Suntel posted a net profit of LKR 311 million for the first half ending June 2007. Revenue rose to LKR 3.6 billion from LKR 3.3 billion in the first half of 2006.
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