Vodafone Plc acquires Essar?s stake in Vodafone Essar (India)
Vodafone Group Plc has completed the acquisition of the 33 per cent stake held by the Essar Group. It has paid a total of $5.46 billion by agreeing to pay an additional $460 million above the earlier decided sum of $5 billion. Vodafone has withdrawn its application with the Authority for Advance Ruling after the Essar Group agreed to pay the withholding tax on the $5.46 billion deal. Vodafone has, therefore, made a net payment of $4.58 billion to the Essar Group, after deducting the withholding tax of $0.88 billion. The deal has been structured in two tranches. In the first tranche, Vodafone has paid $3.32 billion for the 22 per cent stake in Vodafone Essar. The transfer of these shares from Essar to Vodafone has already been completed. In the second part, Vodafone will pay $1.26 billion for the remaining 11 per cent stake held by Essar Communications Holding Limited by 15 February 2012.
Essar to exit telecom business in Africa
The Essar Group is planning to exit the telecom business in Africa. The telecom service operations, which Essar acquired from Warid Telecom in Uganda and Congo, are likely to be sold off. Essar is also looking to sell its telecom operations in Kenya. The group had bought these operations for about $150 million and invested another $100 million in it. It is looking to sell off the stake for about $300 million.
Bharti pays last tranche for Zain acquisition
Bharti airtel has paid the last tranche of $700 million to Kuwait-based Zain for buying its African telecom assets, thereby completing the full and final cash payment of $9 billion. Bharti airtel acquired Zain Telecom?s African operations for $10.7 billion in 2010 to become the world?s fifth largest mobile operator with a total of 180 million subscribers globally. While Bharti had paid $7.9 billion at the time of signing the deal, $400 million was paid later. The remaining $700 million was to be paid after a year. Bharti had also taken on its books Zain?s debts of over $1.7 billion as of December 2009.
ASSOCHAM to establish fund for R&D in mobile telephony
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has decided to set up a Rs 1 billion-Rs 2 billion Digital Incubation Fund in July 2011 to provide seed funds to IT start-ups with a focus on research and development (R&D) in the mobile telephony space. Spice Mobility will buy out 10-20 per cent stake in this fund as an anchor investor. Simultaneously, ASSOCHAM would start a Digital Innovation Forum, AssochamOne, to bring together young entrepreneurs, application developers, the venture capital community, governments and telecom service providers.
MTNL plans to raise Rs 15 million debt in tranches
Mahanagar Telephone Nigam Limited (MTNL) has invited expressions of interest from banks to provide a long-term loan of Rs 15 billion. The company plans to use this to repay its debt and meet its operational expenses. The loan will be raised in tranches according to the company?s requirement, without any penalty and interest, from the date of obtaining the loan. The sale of the tender document started on July 4, 2011 and closed on July 11, 2011. Meanwhile, the company is in the process of restructuring a Rs 70 billion loan it took to purchase 3G and broadband wireless access spectrum.
One97 Communications buys stake in Singapore-based LeapSky Wireless
Value-added services provider One97 Communications has acquired a stake in Singapore-based LeapSky Wireless by investing an undisclosed sum. LeapSky provides mobile broadband on 3G or Wi-Fi on global roaming, thereby offering an affordable option for users and a huge revenue stream potential for telecom operators. LeapSky?s product offering could add potential value to One97?s product portfolio as the latter plans to enter the capital markets this year. One97?s initial public offering is estimated to be around Rs 1.2 billion.
PT Telekomunikasi Indonesia to buy out SingTel?s stake in PT Telkomsel (Indonesia)
Indonesian telecom operator PT Telekomunikasi Indonesia is planning to buy out SingTel?s stake in their jointly owned mobile venture PT Telkomsel. PT Telkomsel, Indonesia?s largest mobile operator, is owned by Telkom (65 per cent stake) and SingTel (35 per cent). The company is in the process of selecting a financial adviser to decide the way to buy back Telkomsel?s stake. Telkom hopes to complete due diligence for the buy-back by end-2011.
CVC Capital Partners Asia Pacific acquires stake in LinkNet (Indonesia)
Private equity group CVC Capital Partners Asia Pacific has completed the acquisition of a minority stake in Indonesian internet, data and pay-TV service provider LinkNet. The private equity firm has acquired a 33.94 per cent stake in the operator for IDR 1.63 trillion, with an option of raising its holding to 49 per cent. LinkNet will continue to be 51 per cent owned by First Media, its parent company.
Telecom Italia acquires AES Atimus (Italy)
Telecom Italia, Italy?s largest telecom operator by subscriber share, has acquired Brazilian fibre optic grid company AES Atimus for Euro 700 million. Telecom Italia is pursuing emerging markets to offset the weak growth in the domestic market. AES Atimus, a unit of US power company AES Corporation, owns a fibre optic network that covers 5,500 km in the densely populated areas of Rio de Janeiro and Sao Paulo. Telecom Italia has not taken any debt for funding the deal and will finance it with cash.
