The Hindu : Business : Bharti to buy stake in Hexacom

Online edition of India's National Newspaper
Tuesday, Apr 06, 2004

Business

Business

Bharti to buy stake in Hexacom

By Our Staff Reporter

NEW DELHI, APRIL 5. The Bharti group today announced that it would soon acquire majority stake in the Rajasthan-based cellular operator, Hexacom. For acquiring 67.5 per cent stake in Hexacom India Limited, Bharti Tele-Ventures will have to shell out Rs. 430 crores for majority shareholding and majority on its board of directors.

"The transaction is principally a share-swap deal, wherein shares and optimally convertible redeemable debentures (OCRD) of Bharti Tele-Ventures are proposed to be issued to the Shyam group as swap for their holdings in Hexacom," a Bharti group statement here said.

The deal is proposed to be funded by way of issue of equity shares of Bharti Tele-Ventures for Rs. 75 crores, issue of OCRD for Rs. 300 crores and the balance in cash, the statement said. The acquisition is subject to right of first refusal with the existing shareholder of Hexacom, which is TCIL.

"The acquisition would give Bharti a presence in Rajasthan, thereby expanding its footprint to all over India. Bharti also intends to consolidate its stake in Hexacom as and when an appropriate opportunity comes its way," it added.

The move comes after Bharti made a pitch to acquire Canadian company TIW's about 27 per cent stake in Hexacom but lost out to Shyam which exercised its right of first refusal to acquire the Canadian major's equity.

Ambit Corporate Finance advised Bharti on the transaction while Prime Securities advised Shyam Group.

Significantly, Hexacom operates GSM mobile network in Rajasthan and has over 2.5 lakh subscribers as on March 31, 2004, with over 44 per cent share of the GSM market of Rajasthan. Hexacom also has a licence to offer GSM mobile services in the North-East.

Private operator Bharti has an aggregate of seven million customers, consisting of six million mobile customers. The company offers mobile services in 15 out of 23 circles in India. The company also provides fixed-line services in five circles.

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