Chandrasekhar not to exit BPL Comm

Plans are afoot to rope in a strategic investor.

Rajeev Chandrasekhar is in no hurry to exit BPL Communications. Instead, he plans to allot fresh equity to a strategic investor to raise additional capital for business expansion planned during the next financial year.

"Any strategic stake sale will be through a fresh issue. According to our plan the strategic investor should be in place by the end of this year or by early 2006," Chandrasekhar, chairman and managing director of BPL Communication told Business Standard.

BPL Communications planned to enter new markets during the next financial year, he added.

According to a senior company executive, China Mobile, the Egypt-based Orascom Telecom and the Russia-based Alpha Telecom are in talks with the company besides other global players, which do not have a foot hold in India.

"A delegation from China Mobile held discussions with us during the Chinese Premier's visit recently," the company executive, said.

"While China Mobile is keen on a 74 per cent stake in the company, other operators in the race are looking for a minimum 51 per cent or a clearly defined path to it," a senior company executive told Business Standard.

Chandrasekhar was in London recently, where he held discussions with Vodafone. With every conceivable player, including NTT Docomo, in the fray to own BPL Communications, the percentage of stake on offer depends mainly on the price.

The only thing that seems to be clear according to the company executive is that "the stake is unlikely to be given to a financial investor".

Even that may change if the government exempts venture capital firms from the restriction of not holding over 10 per cent in two companies' operating in the same circle. At present, STT and Essar's chances of striking a deal are stuck due to DOT regulations.

While Chandrasekhar may not have plans to encash out of BPL communications, the fact is that he directly holds just 5.8 per cent stake in BPL Communications.

The Nambiars who are fighting a legal battle with the company have alleged that Tayana Consultants and Coimbatore Cablenet who together hold 57 per cent stake are Chandrasekhar's front companies. These charges have been denied by BPL Communications as baseless.