In what could be its first acquisition, state-owned telecom firm MTNL is close to buying Sri Lankan fixed-line operator Suntel and has sent a high-level delegation to start technical assessment of the company. A delegation has left for Sri Lanka to hold discussions with Suntel on the technical assessment, which is a prerequisite to formalise the deal, company sources said.
The delegation will be in Sri Lanka for four days to conduct due diligence, they said. MTNL is believed to have emerged as the highest bidder for Suntel with a bid between $160-180 million. If the deal goes through, this will be the NYSE-listed Indian company’s first acquisition. It will also give MTNL a foothold in Sri Lanka’s fast-growing telecom market.
The Colombo-based company offers fixed-line service on CDMA-based technology’s WLL platform. All its key shareholders want to exit, sources said.Nordic company Telia is Suntel’s top shareholder with 55% stake through its holding firm Overseas Telecom. The remaining stake is held by Sri Lanka’s Metrocorp, the National Development Bank Of Sri Lanka, Townsend of Hong Kong and International Finance Corporation.
MTNL, which has been trying to grow business beyond Delhi and Mumbai, had in March lost the race for Saudi Arabia’s third mobile licence and fixed-line licence in April. It had also lost a bid for a licence in Kenya. But it has a licence to offer fixed-line, cellular and ILD services in Mauritius.