BPL pulls out of VSNL bidding consortium

By : |October 31, 2001 0

Santosh Menon

NEW DELHI: Telecoms group BPL Communications has pulled out of the bidding
consortium eyeing a controlling stake in state-run telecoms giant VSNL being
privatized by the government.

But it said in a statement on Wednesday it still was "keenly
interested" in India’s monopoly overseas telecommunications carrier and
"would evaluate other options and alternatives for participating in this
bidding process".

The privatization of Videsh Sanchar Nigam Ltd — billed as India’s most
ambitious yet in a decade of economic reforms — is in its final stages with the
government expected to invite price bids from prospective suitors in December.

Unlisted BPL Communications had teamed up with another Indian company
Sterling Ltd. and two US firms, Century Tel and TyCom Ltd, to bid for VSNL, the
country’s largest Internet access provider. But the Bangalore-based group with
large interests in the Indian mobile phone business, said it had reviewed its
bidding strategy and decided to withdraw from the consortium.

Other members of the consortium said they were going ahead with their bid.
"We continue to be interested. The remaining members of the consortium are
going ahead with the bid," consortium spokesman V. Srinivasan told Reuters.

BPL, Tata tie-up?
Sources in BPL said they were keen to explore a tie-up with the Tata group,
India’s second-largest private business conglomerate, which is one of the
bidders for VSNL.

In June, BPL Communications said it was merging its mobile phone business
with that of another mobile company Birla-AT&T-Tata, in a $2 billion deal to
create India’s largest mobile phone company. Birla-AT&T-Tata is an equal
venture between US telecoms giant AT&T and the Birla and Tata groups.

"The VSNL bid was put in before the merger announcement. It’s only
natural that they’ll now look to ally with the Tatas," said an analyst with
a foreign brokerage, who asked not to be named.

The government plans to cut its stake in the New York Stock Exchange-listed
VSNL to 26 per cent from 52.97 per cent now by selling a 25 per cent stake to a
strategic partner and another 1.97 per cent to VSNL’s employees. Three bidders
were in the fray to win control of VSNL, including India’s largest business
conglomerate, the Reliance group, the Tatas and the BPL-Sterling-Tycom-Century
Tel consortium.

The sell-off has already seen the exit of three bidders — the Birla group,
consumer electronics group Videocon and a consortium comprising Bharti
Enterprises and Singapore Telecom.

VSNL’s shares were little changed at Rs 229.75 in Wednesday afternoon trading
on the Bombay exchange whose 30-share benchmark index was up 0.30 per cent.

(C) Reuters Limited.

No Comments so fars

Jump into a conversation

No Comments Yet!

You can be the one to start a conversation.