Bharti, Punj Lloyd Decline to Extend Bids for Hexacom Stake
Bharti Airtel Ltd. (BHARTI), India’s largest mobile-phone operator, and Punj Lloyd Ltd. (PUNJ), an engineering company, didn’t renew offers to buy the government’s stake in a wireless services provider in the northwestern state of Rajasthan.
Both companies said in separate statements today they exited from the bid after the government’s stake sale in Bharti Hexacom Ltd. took longer than expected. Their offers expired March 13. Bharti owns 70 percent of the company, while the government holds the rest.
“It was due to procedural delays as the government has to fix a reserve price on” the sale of stake in Hexacom, said K.B. Batra, director, finance at Telecommunications Consultants India Ltd., which holds the stake in the Bharti unit. “It took time in examining it.”
Bharti, which bought Hexacom from India’s Shyam Group seven years ago, has been trying to buy the remaining stake in the unit since 2006, when it first bid to buy out the government.
“The process of disinvestment of 30 percent holding of TCIL in Bharti Hexacom had been initiated by the government several times,” according to Bharti’s statement. “Due to procedural issues the process has not culminated into finality. Bharti Airtel therefore has decided not to extend the bank guarantee and the offer to buy 30 percent equity.”
Punj Lloyd’s aim to buy the stake was to make a “significant gain” by investing in Hexacom for a short time, spokeswoman Louise Sharma said in an e-mailed statement.
Hexacom also offers services in northeastern Indian states.
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