Following the Supreme Court order cancelling 122 licenses of 22 operators, Bahrain Telecom, which owns about 42.7% stake in Indian telecom operator STel has exited the venture by selling its shares at a price of $175 million back to STel, reports Moneycontrol. Batelco had formed a special purpose vehicle with Dubai based Millennium Private Equity to acquire 49% stake in S Tel for $225 million in 2009, wherein the company had invested $175 million with the rest being invested by the PE firm.The sale is expected to be completed in October 2011.
Batelco said that it had expressed an intent to sell for the stake sale, last year and had an understanding with S Tel for the same, given the circumstances surrounding the 2G probe in India over the past 12 months. It had entered into an agreement with the company in Q4 2011 for the sale.
S Tel holds licenses in Himachal Pradesh, Jammu & Kashmir, Bihar, Orissa, Assam, and the North-East. The Supreme Court order has resulted in cancellation of S Tel’s licenses in all these circles. Till December 2011, S Tel had 3.54 million subscribers out of which only 1.06 million are Active.
This would make Batelco the first foreign company to exit the Indian market after the Supreme Court ruling. Other major investors who have been affected include Telenor, Etisalat and Sistema. Telenor has already threatened to exit if the base price for spectrum is too high or incumbents are allowed to participate in fresh spectrum auction. Telenor has written off NOK 4.1 billion in Indian operations, after the ruling.