Government to sell its stake in Bharti Hexacom
By siliconindia   |   Monday, 13 July 2009, 19:35 IST   |    1 Comments
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Government to sell its stake in Bharti Hexacom
Bangalore: The government is all set to sell of its holdings in Bharti Hexacom, a subsidiary of Bharti Airtel. The key ministries have approved a cabinet note moved by the Department of Telecom (DoT) to divest the government's stake in Bharti Hexacom. The government's 30 percent stake in Hexacom is held through the Telecom Consultants of India (TCIL). The remaining 70 percent is held by Bharti Airtel. Bharti operates through Hexacom in six states which includes the North East (except Assam) and Rajasthan. The subsidiary has less than nine million subscribers. The Union Cabinet will now be approached for formal approval for the disinvestment. This will mark the second major disinvestment for the communications ministry after the UPA regime was re-elected. TCIL had tried to exit Hexacom in 2005-06 but later decided against it since the price offered by Bharti was too low. The department of disinvestment (of the ministry of finance), has however asked that legal advisers and valuers for the transaction be appointed through a transparent process. The current exit has been decided on account of two factors. Firstly, TCIL had been seeking dividend payouts every year which Bharti group constantly turned down. Secondly, TCIL had also been seeking the listing of Bharti Hexacom, which too was turned down, on the grounds that their policy does not permit subsidiaries being listed. As per DoT records, Hexacom had revenues of 1,345.8 crore in 2007-08 and a profit and net worth of 330.7 crore and 918.2 crore respectively, during the same period. It also estimated that these figures increased significantly in 2008-09.

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