Sources said Bharti, which runs cellular and basic services under the Airtel brandname in Delhi, HP and Madhya Pradesh, is close to clinching the deal.

Bharti Enteprises chairman Sunil Mittal confirmed that talks were on. "We are in talks but the finalisation of the deal could take some time," he said. Bharti's bid ties in neatly with its plans to expand its cellular operations in the country.

Mittal told The Financial Express that some issues were yet to be decided. These include ratification of the new telecom policy by the Lok Sabha, which is now expected to go through smoothly following return of the Vajpayee government. Another issue which is to be settled is the percentage of revenue sharing. Sources close to Crompton Greaves management said deal would be inked soon.Bharti has edged out other contenders like Escotel and BPL Telecom, according to sources.

The deal, once through, would leave Crompton Greaves with a net gain of over Rs 225 crore. The Thapars-controlled Crompton Greaves had spent about Rs 25.20 crore in the project at the time of its commissioning in 1994. The cash inflow would help Crompton Greaves retire part of its high cost debt. The secured and unsecured debt as on March 1999 stood at Rs 513.06 crore and Rs 155.62 crore. The company has been paying high interest cost and the saving by repaying the debt will directly add to its bottomline and eventually boost its earning per share.

Interest cost for the year ended March 1998 and 1999 stood at Rs 66.18 crore and Rs 79.07 crore. The interest outgo for the first quarter ended June 1999 stood at Rs 23.15 crore. Although Crompton has a high net worth of over Rs 551 crore as on March 1999 (reserves of around Rs 498.93 crore), a reduction in debt will also help improve its leverage.

Other stakeholders inSkyCell are DSS Enterprises, Bellsouth and Millicom of the USA. DSS holds 10.5 per cent stake, while Bellsouth and Millicom hold 24.5 per cent equity in the venture. Skycell reported a loss of Rs 42 crore at a turnover of Rs 34 crore during 1998-99.

Crompton Greaves scrip is trading around Rs 75 on the bourses after witnessing a high of Rs 90 in August this year. The stock has been on the rise in the past few sessions from Rs 64 to Rs 75 and has been attracting heavy trading volumes.