France Telecom (Orange SA) has exited BPL Mobile Communications, the global systems for mobile services company in Mumbai.
The French company has sold its 16.1 per cent stake in BPL Mobile Communications, to overseas investor Asia-Pacific Systems, and the remaining 9.9 per cent stake to Essar Teleholdings, the telecom arm of the Essar group. Both deals were done overseas for an undisclosed amount.
Although the financial details of the deal were not available, an Essar group spokesperson confirmed the development.
France Telecom owns the 'Orange' brand.
The Essar group also has an interest in Hutchison-Essar. The Essar group will have close to a 36 per cent stake in the combined entity that is proposed to be formed after consolidating the equity in the 10 circles operated by Hutchison Essar.
Essar Teleholding has merged its circles in eastern UP, Haryana and Rajasthan with Hutchison Essar, and the process for merging the entire operations is currently on, Essar sources said. Hutchison Essar has a subscriber base in excess of seven million.
Sources close to the deal claim the Essar group is looking at the deal as a financial investment. "Essar Teleholdings might exit its holding in favour of the strategic partner in BPL Mobile," a BPL Mobile source claimed.
In fact, the promoters of BPL have already hired the services of investment bankers JM Morgan Stanley to look for a strategic partner in all of its three telecom ventures -- BPL Communications, BPL Mobile Communications and BPL Cellular.
TPG Nambiar and Rajeev Chandrasekhar, the BPL promoters, together hold a 60 per cent stake in BPL Communications and the remaining 40 per cent is held by foreign investors such as CDC, AIG, AIDEC and TVG.
BPL Communications, in turn, holds a 74 per cent equity in BPL Mobile Communications, which operates in the Mumbai circle. The remaining 26 per cent was held by France Telecom.
BPL Communications holds 100 per cent of the equity in BPL Cellular, which operates in the Maharashtra and Goa, Kerala and Tamil Nadu circles. France Telecom has been a passive investor in BPL Mobile Communications.Faced with financial difficulties, France Telecom recently exited from similar investments in Thailand and Indonesia and has decided to focus only on the European market.