BSNL, MTNL join Zain bid consortium

A few weeks after state-run telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) denied that they were part of a consortium bidding for Kuwait-based Zain Telecom, both the companies have written a joint letter to the Vavasi group, expressing their keenness for a joint bid, sources close to the group told Business Standard.

A news agency quoting Kharafi’s Group Vice-Chairman Bader al-Kharafi said: “The Kharafi group has received an official letter addressed to Vavasi, stating that BSNL and MTNL are interested to participate in the proposal for buying up to 46 percent of Zain's shares from the Kharafi group.”

BSNL Chairman Kuldeep Goel and MTNL Chairman R S P Sinha could not be reached for comment.

The consortium, led by little-known Delhi realtor Vavasi, and Malaysian billionaire Syed Mokhtar al-Bukhary, is close to appointing international investment bankers for the valuation exercise.

BSNL and MTNL will separately appoint their bankers for legal due diligence and valuation once they receive government approval for the deal.  

The group will pay two dinars a share for Zain, valuing the stake in the Arab world's third largest telecommunications company at about $13.7 billion, Kharafi had said, making it one of the biggest overseas acquisitions of a Gulf region company.

Last month, Kharafi, a major shareholder in Zain, had said it would sell its 20 per cent stake and an additional 26 per cent from other stakeholders to the consortium. The deal was estimated at $13.7 billion.

However, after this announcement, BSNL and MTNL denied being part of any consortium.

BSNL and MTNL's entry adds to the competition among Indian corporations for one of Africa and West Asia's most valuable telecom assets, with Bharti Airtel and the Essar group also reportedly in the fray.