Escorts defers decision on Escotel sale to Idea

Escorts Ltd has deferred decision on selling its cellular business Escotel to Idea Cellular.

The Escorts board, which met today to discuss the Idea Cellular proposal, informed the Bombay Stock Exchange that it could not take a decision.

Bharti Tele-Ventures has also expressed its interest in picking up stake in Escotel.

While Escotel officials were not available for comments, industry sources said that the board could not agree on the valuation since there were two bidders in the race. They also said that there was some uncertainty on policy relating to intra-circle merger.

Bharti has mobile services in all the three circles where Escotel operates.

Escotel and Idea have been negotiating the deal for the last six months. Escotel currently operates mobile services in Kerala, Uttar Pradesh and Haryana with nearly 8 lakh subscribers.

Since Idea Cellular does not have presence in these circles, buying out Escotel would enable it to come back among the top mobile operators in the country.

At present, Escotel is a 51:49 joint venture between the Nanda's promoted Escorts Ltd and Hong Kong-based First Pacific.

Escotel, with a debt of around Rs 800 crore, has been scouting for joint venture partners for the last three years.

It could also not launch its fourth operator's licence for Himachal Pradesh owing to lack of funding.