According to news reports, Essar and its associate companies have signed agreements with almost all the shareholders of BPL Mobile to acquire their equity at an enterprise value of $1 billion. With a debt of $600 million on BPL’s books, the net value of the deal is $400 million. The part-equity, part-cash deal is expected to be completed by the end of May. The reason for the associate companies buying the equity is that, according to the licence conditions, a company cannot hold more than 10 per cent equity in more than one operating company in a circle. As part of the agreement, all the shareholders will have to withdraw their court cases (most of them are currently engaged in litigation over control of the company’s assets). BPL Mobile provides cellular service in Mumbai, Maharashtra, Kerala, Tamil Nadu, Pondicherry and Goa.
