TPG Nambiar, the BPL group patriarch, and his son-in-law, Rajeev Chandrasekhar, have reached an out-of-court financial settlement over BPL Communications.
According to sources close to the development, Nambiar was looking for Rs 125-150 crore (Rs 1.25-1.5 billion) by exiting BPL Communications to fund his share of investment in the proposed 50:50 joint venture with Sanyo of Japan for colour televisions.
The family feud came to an end today when Nambiar sought to withdraw his petition against Chandrasekhar at the Company Law Board, Chennai. CLB Additional Principal Bench Vice-chairman KK Balu then "dismissed" the petition.
This has cleared the way for Chandrasekhar to offload 49 per cent stake in the company to a strategic investor. BPL Communications is the holding company for BPL Mobile Communications and BPL Cellular.
BPL Mobile Communications operates cellular services in Mumbai, while BPL Cellular runs services in Tamil Nadu (excluding Chennai), Kerala and Maharashtra (excluding Mumbai).
Chandrashekhar has been in talks with several telecom operators including China Mobile, Egypt-based Orascom Telecom and Russia-based Alpha Telecom for selling a stake in BPL Communications. With the spat with his father-in-law over, sources close to Chandrashekhar said that he could clinch a deal fast.
Besides these, Essar is the other Indian company, which is also said to be in the reckoning. Another buzz doing the rounds is the merger of BPL Communication with IDEA and Spice Telecom to create a pan-India entity taking on Airtel and Hutchison.
The fight between the two came out in the open in September last year when Nambiar petitioned the CLB to restrain Chandrashekhar from selling BPL Communications shares alleging that he had surreptitiously upped his stake in the company. In his defence, Chandrashekhar had said all the transactions had been above board.
BPL Communications during its past ten year of operations has invested around Rs 4,500 crore (Rs 45 billion) and it reported an operating profit of Rs 406 crore (Rs 4.06 billion) for 2004-05, up 42 per cent over 2003-04. Revenues were up 39 per cent to Rs 1,012 crore (Rs 10.12 billion) for 2004-05 as against Rs 728 crore (Rs 7.28 billion) for 2003-04.
24 Sept 2004: TPG petitions CLB to restrain son-in-law from selling BPL Comm shares
27 Sept 2004: CLB orders status quo on BPL Comm shareholding
30 Sept 2004: CLB lifts freeze following Chandrasekhar plea
2 Dec 2004: France Telecom sells 26% BPL Mobile stake to Essar and foreign investors
10 Dec 2004: Supreme Court bars share sale in BPL Comm
10 May 2005: CLB okays BPL comm share sale
- 15 July 2005: TPG agrees for out-of-court settlement with Chandrasekhar