Etisalat-Swan gets DoT NoC to buy Allianz Infra
Posted by telcobizpedia on May 27, 2009
27 May 2009, 0113 hrs IST, Joji Thomas Philip, ET Bureau
NEW DELHI: Telecom service provider Etisalat-Swan has bought out Allianz Infratech, marking the first acquisition among the new companies who were given telecom licenses last year. Etisalat-Swan has also got a ‘no-objection certificate’ from Department of Telecom (DoT) for the deal, which is estimated to be worth a few hundred crores.
Allianz had applied for telecom licences on a pan-India level, but was given permission to launch services in only two circles — Madhya Pradesh & Bihar. Swan, which has bagged licences to operate in 13 of the 22 telecom zones in India, is not present in these two circles. Allianz Infratech is promoted by four individuals — aviation entrepreneur Ajay Singh, Ashish Singh, Praveen Singh and Ashish Deora, who hold 25% each in the company. Last year, UAE’s Etisalat had picked up a 45% stake in Swan for $900 million.
ET had first reported in its edition on September 25, 2008 that the Swan-Etisalat combine would buy out the telecom licences held by Allianz Infratech. Following the deal, Etisalat-Swan, which is expected to launch services soon, will be able to provide telecom facilities in 15 circles covering over a billion people. Allianz has become the first of the new entrants to sell out. Its promoters have opted to sell out even as the government is debating lock-in clauses to prevent new entrants, who got licences at prices fixed in 2001, from cashing out.
Last year, Allianz Infratech failed to make the cut to bag a pan-India telecom licence as its net worth was lower than the mandated Rs 1,350 crore. It was later awarded licences for only two circles. There have been allegations that the DoT had given licenses in two circles to Allianz in order to allow Etisalat-Swan to buyout the company and expand its footprint.
While Allianz paid about Rs 30 crore as entry fee for these two circles, the value of these licences would be multiples of that amount. For instance, Swan paid about Rs 1,400 crore for its licences in 13 circles, but offloaded 45% stake to UAE’s Etisalat for $900 million (Rs 4,500 crore).
The DoT, in a communication to Etisalat, said that it was granting a ‘no objection certificate’ for the merger subject to both companies meeting all regulatory requirements. Etisalat-Swan will also get the 4.4 MHz of start up radio frequencies that is held by Allianz in both the circles. The DoT has also asked Etisalat-Swan to submit a fresh proposal for the merger after the deal has been approved by the High Court or tribunal.