Nambiars Selling 4% Bpl Cellular Stake To Adb
The Nambiar family, promoters of the Bangalore-based BPL group, is selling 4 per cent stake in BPL Cellular Holdings _ the holding company controlling stake in BPL Mobile, the Mumbai cellular operator _ for an estimated $25 million (over Rs 105 crore) to the Asian Development Bank (ADB).
The sale marks the third such deal with financial investors that the promoters have concluded since mid-1997. In a $77.5 million (about Rs 278.64 crore at prevailing foreign exchange rates) deal with the American International Group (AIG) and the Peregrine's Asian Infrastructure Fund
(AIF), the Nambiar family placed 24 per cent in BPL Cellular Holdings.
Then, in December the family raised about $40 million (more than Rs 160 crore) in a subordinated debt-cum-equity deal with Commonwealth Development Corporation (CDC), a UK-based development fund for investment in BPL Mobile directly.
After the ADB deal, the Nambiar family will hold about 56 per cent in BPL Cellular Holdings, with the remaining equity being held by AIG and AIF (24 per cent), LCC of the US (13 per cent), ADB (four per cent) and CDC (three per cent). The deal with ADB will take the total money raised by BPL by disinvesting stake in its mobile telecom business to about Rs 543 crore. The private placement with AIG and AIF, the CDC deal and, now, the ADB contract are part of fund-raising efforts by the group after its failed foray into the American depository receipts (ADR) markets in 1996.
The $200 million to be raised through the ADR issue was primarily meant for financing equity BPL Mobile, BPL-US West (the cellular operator in Maharashtra, Tamil Nadu and Kerala) and paging service operator BPL Wireless Telecommunications; paying off debt from affiliate companies and banks and for general corporate purposes. Bulk of the ADR proceeds (approximately $125 million) was to finance infrastructure equipment and working capital.
BPL Cellular Holdings owns 74 per cent equity in BPL Mobile and 50.02 per cent in BPL-US West. At time of the ADR issue, the holding company also held 100 per cent equity of BPL Wireless Telecommunications, but the paging company was demerged before the private placement of equity in April last year.