Pilot: Revealing plans

New Delhi, Nov. 22: The government has approved in principle the sale of its entire 30 per cent stake in Bharti Hexacom, Sachin Pilot, minister of state for communications and IT, told the Lok Sabha today.

The government holds its stake in Bharti Hexacom through Telecom Consultants of India Ltd (TCIL), an unlisted firm that undertakes telecom projects and offers consultancy services in India and abroad. Bharti Airtel, the largest mobile operator in the country, holds the remaining 70 per cent.

Bharti Airtel’s operations in the six northeastern states (excluding Assam) and Rajasthan are through Bharti Hexacom. The cabinet had given its go-ahead for the divestment last year.

According to sources, the consultants appointed by TCIL to oversee its exit from Bharti Hexacom have said the reserve price for the entire stake should be between Rs 1,500 crore and Rs 1,800 crore.

This values Hexacom, which has a customer base of around 13 million, at about Rs 6,000 crore. Bharti has the first right of refusal to TCIL’s stake in Hexacom.

The telecom ministry has now approached an empowered group of ministers to finalise the reserve price.

TCIL had earlier tried to exit Hexacom in 2005-06 but decided against it as the price offered by Bharti Airtel was too low. Bharti Airtel had offered Rs 262.5 crore for TCIL’s stake.

“The sale should be at the right time to obtain the best price,” Pilot said in the Lok Sabha.

TCIL officials said they had received expressions of interest from local and foreign companies for the stake and would take a decision in consultation with the telecom department. In March, TCIL had invited expressions of interest for the sale of its stake through an open bidding process.

TCIL will have to follow a two-stage bidding process, where it will first evaluate the technical bids and only those who clear this stage, will be considered for the financial bids.

It will then have to finalise the sale in consultation with both the telecom ministry and the department of economic affairs.

According to the DoT records, Hexacom had revenues of Rs 1,346 crore and a profit of Rs 331 crore in 2007-08. Its net worth was Rs 918 crore.

Last year, all key ministries had given their approval to a cabinet note moved by the telecom department on exiting Bharti Hexacom.