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Middle Eastern operator selling Indian business

India’s cancellation of 2G licences continues to shake up its telecom sector, with Middle Eastern firm Batelco announcing that it will sell its stake in the Indian operator STel. Batelco’s holds 42.7% of the operator and is selling this stake to Sky City Foundation for US$174.5 million – the same amount for which it acquired the operations in 2009.

Although the recent licence cancellations have prompted several foreign operators to lower the value of their Indian businesses, Batelco claims that it was looking to sell its stake in STel “as early as April 2011”, suggesting that licensing issues were not the driving factor behind this decision. The sale was agreed in Q411.

Batelco has stated that the sale of its holding is part of “an earlier understanding with its Indian partner to exit, given the circumstances surrounding the 2G probe in India over the past twelve months.”  The firm has also confirmed that it played no part in obtaining STel’s licence, “nor had any knowledge of the events surrounding the granting of the 2G licences in January 2008.”

“As Batelco continues to grow and diversify its operations, we remain interested in other investment opportunities for the Batelco Group that will enable us to participate in the Indian telecom market. We are actively exploring all options in this respect over the coming months,” the firm stated.

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