MUMBAI, February 20: Max India, belonging to Bhai Analjit Singh, is negotiating with some leading financial investor groups and private equity firms for selling off part of its equity stake in Hutchison Max Telecom, which operates cellular services in Mumbai.Max India currently holds 100 per cent of Max Telecom Ventures Ltd (MTVL), which in turn holds a 51 per cent stake in Hutchison Max and another 51 per cent in Comsat Max India, a provider of VSAT services. Hong Kong-based Hutchison Whampoa holds the balance stake in the cellular venture.
"Substantial funds will become available to Max following the conclusion of the transaction in reduction of stake in Hutchison Max, which will give the company enormous financial resources to address real opportunities that will emerge in various industries, including telecom. The funds to be released from the placement of its equity stake in Hutchison Max Telecom would give the company a unique advantage in planning its future prospects including strengthening itsposition in its existing business through acquisition," said a company statement.
In conformity to government policy Max will retain a minimum 10 per cent stake in Hutchison Max Telecom. Max will also continue to hold its 51 per cent share in Comsat Max, which provides VSAT service to discerning customers like Citibank, Castrol, Pynj-Lloyd and Mastercard, Max officials said, adding, "Hutchison Max Telecom will continue to be managed by its fully empowered team of professional managers and the operations will not be affected by the envisaged change in ownership structure."
Telecom industry sources were of the view that the dilution of stake by Max India is the only way for the Indian partner to bring in funds. MTVL is now in the process of raising Rs 200 crore through a combination of equity and debt while HMTL is on the lookout for Rs 300 crore in debt.
Financial projections made by HMTL show equity for the venture moving up from Rs 79.60 crore in 1995-96 to Rs 450 crore in 2000-2001. For 1997-98,HMTL's equity has been pegged at Rs 375 crore with loans at Rs 358.90 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
