Usha Martin Seeks Equity Partner For Telecom Venture

Cellular and paging operator Usha Martin Telekom Ltd (UMTL), a 51:49 joint venture between the Usha Martin group and Telekom Malaysia Berhad, is scouting for a financial investor for equity participation in the company.

The Usha Martin group may dilute its stake to 30 per cent from the current 51 per cent in UTML.

Peregrine Securities-backed Asia Infrastructure Funds (AIF) Telekom Fund is most likely to have a maximum 20 per cent stake in UMTL.

Earlier, Usha Martin group had placed a proposal to divest a portion of its equity in UMTL through two holding companies.

The proposal was later withdrawn following rejection by the foreign investment promotion board (FIPB).

 

However, the second proposal placed before FIPB, which envisaged AIF Telekom Fund acquiring nearly 32 per cent stake through the holding company, Usha Martin Telematics Ltd (UshaTel), is being pursued. Usha Martin Telekom had appointed investment bank J P Morgan last year to find a equity partner for a 30 per cent stake in the project.

Usha Martin Telekoms cellular arm Command, which is hoping to break even by the end of the current year, recently pumped in considerable amount of funds to expand and upgrading its cellular infrastructure in Calcutta including expansion of switching capacity, and introduction of a wide range of value-added services.

The need for a new partner is mainly to meet the fund requirements for its projects and operational costs.

Command, which has successfully conducted trial runs for automatic roaming with Mumbai and Delhi, is currently awaiting the department of telecommunications (DoT) clearance for all-India connectivity.

Automatic roaming will enable cellphone users to receive calls which would be automatically diverted to the cellphone holder while visiting different cities.