The Essar group has acquired TPG Nambiar's 13 per cent stake in BPL Communications for Rs 125 crore (Rs 1.25 billion). This comes nearly two months after it acquired the 64 per cent stake of Nambiar's son-in-law and former chairman and CEO of the telecom firm Rajiv Chandrasekhar.
Sources close to the development said Essar Teleholdings, the investment arm of the Essar group in the telecommunications business, had bought Nambiar's shareholding, and an offshore outfit of the Essar group had struck deals to purchase the holdings of AIG and Actis (formerly, CDC Financial Services) in the company. Foreign investors AIG, Actis, Telecom Ventures Group and Aitec together hold 22 per cent in BPL Communications.
"The Essar group is also in talks with TVG and Aitec to buy their shareholdings in BPL Communications," the sources said.
An Essar group spokesperson confirmed the agreement to buy the stakes of AIG and Actis, but declined to divulge the consideration on the plea that the group did not comment on the size of a particular deal.
The acquisition of Nambiar's stake has taken the Essar group's holding in BPL Communications to 77 per cent, one per cent more than what is required to carry a special resolution.
"The Essar group got majority control with the acquisition of Chandrasekhar's 64 per cent stake in BPL Communications. Now, the purchase of Nambiar's shareholding provides the group absolute control," said an industry expert.
If the valuation of the Nambiar-Essar Teleholdings deal was any indication, the financial institutions should end up receiving nearly Rs 212 crore (Rs 2.12 billion).
However, sources said the valuation might differ in case of the financial institutions.
The Essar group had announced in July that it had agreed to acquire Chandrasekhar's controlling stake in BPL Communications for an enterprise value of nearly Rs 5,000 crore (Rs 50 billion).
The enterprise value includes a Rs 2,600-crore Rs 26 billion) debt of the BPL Communications, which holds 74 per cent stake in BPL Mobile Communications (with operations in the Mumbai circle) and 100 per cent in BPL Mobile Cellular (operations in Maharashtra and Goa, Tamil Nadu, Pondicherry and Kerala.) Essar already has a 9 per cent stake in BPL Mobile.