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Tag: Hutchison Essar Ltd

  • HTMT divests stake in Hutchison Essar for $450 million

    HTMT divests stake in Hutchison Essar for $450 million

    MUMBAI: Hinduja TMT Ltd. (HTMT) will be divesting its entire 5.11 per cent stake in Hutchison Essar Ltd (HEL) to Hutchison Telecommunications (India) Ltd. for $450 million.

    The company, with its two wholly owned subsidiaries InNetwork Entertainment Limited (INEL) and Pacific Horizon Limited (PH) and Hinduja Group’s Mauritius based company Kumbat, have entered into a definitive agreement for the stake sale. IndusInd Telecom Network Limited, an SPV (special purpose vehicle), held the shares. Hutchison Telecommunications is an indirect wholly owned subsidiary of the Hutchison Telecommunications International Ltd.

    IndusInd Investment Bank acted as the sole financial advisor to the deal.

    Prior to this sale, HTMT completed the acquisition of the entire shareholding of Sumitomo Corporation in Pacific Horizon. HTMT’s effective shareholding in HEL, thus, increased from 3.45 per cent to 4.68 per cent.

    “The Board decided to monetize its investment in HEL to unlock the value for its shareholders and accepted the offer made by HTIL. The proceeds from the divestment of this stake sale will not only help the company to aggressively pursue its growth path in its businesses but will also enable it to explore opportunities in new lines of businesses,” HTMT executive chairman Ashok P Hinduja said.

    HTMT’s board, which met today, also announced the consolidated results of its media and telecom subsidiaries and IT / ITES-BPO operations. A dividend of Rs 7.50 per share (75 per cent on the par value of Rs 10 per share) for FY06 was recommended, amounting to an outgo of Rs 306.8 million.

    HTMT’s consolidated operating income for the year increased by 37 per cent from Rs 3.18 billion in FY05 to Rs 4.37 billion in FY06. The global IT/BPO revenues increased from Rs 2.02 billion to Rs 3.01 billion during this period.The consolidated total income for the year was Rs 4.69 billion as compared to Rs 6.13 billion during the year-ago period. The previous year income included an extra-ordinary income by way of capital gains of Rs 2.79 billion arising out of swap of shares in Fascel with shares in HEL in the books of its subsidiary IndusInd Telecom Network Ltd. HTMT’s share of profit from the said swap booked during the year was Rs 1.73 billion.

    “The consolidated net profit for the year after considering minority interest was Rs 259 million, which is not comparable with previous year for these reasons,” the company said in a release.

    HTMT’s standalone total income during the year rose 50 per cent to Rs 2.51 billion as against Rs 1.67 billion a year ago. Net profit for the year, however, was lower at Rs 402 million as against Rs 700.5 million. “The performance was impacted mainly due to loss of a US based telecom client during the previous financial year, for which HTMT was operating an inbound call centre at Bangalore at minimum guaranteed volumes. This was coupled with large set up costs on account of furious ramp-ups in the company’s newly started domestic BPO operations,” the release said.

  • Liberty eyeing investment in Indian cable company

    Liberty eyeing investment in Indian cable company

    MUMBAI: As the CAS story firms up, so too does the interest with which big international cable companies view the Indian scenario.

    The most active on this front appears to be John Malone’s Liberty Media Corp, which is eyeing an investment into the cable TV business in India. The company has initiated talks with Hinduja-owned IndusInd Media and Communications Ltd (IMCL) but no breakthrough has been reached thus far, sources say.

    Late last year, a senior team visited IMCL headquarters in Mumbai but talks have stalled after that. A preliminary agreement on the valuations couldn’t be reached, sources say.

    When contacted, Hinduja TMT Ltd MD K Thiagarajan said the cable business of the company was attracting a “lot of interest from strategic and financial investors.” But he refused to comment on whether the company was in talks with Liberty Media. “I can’t comment specifically on any investor,” he said. IMCL, which operates the cable business under Incablenet brand, is a subsidiary company of HTMT.

    Sources say HTMT was looking at a valuation of around $900 million for its cable TV business. Interestingly, Zee Telefilms Ltd chairman Subhash Chandra said, in an interview to a business channel, that the value of his cable assets ought to be in the region of $800-900 million.
    Liberty, however, is waiting to see how conditional access system (CAS) rolls out. Investors feel digital cable TV will help organise the industry and bring subscribers under the addressable system. Average revenue per users (ARPUs) would also go up.

    If Liberty does make an entry into India, then it will be Malone’s second big entry into the Asian market after Japan. According to the latest report by Hong Kong-based Media Partners Asia (MPA), Liberty-controlled J:COM, the most successful broadband cable TV operation in Asia and in Japan, will April 15 launch HDR services (High Definition Recorder capabilities with a High Spec Double Tuner Recorder), a new J:COM digital service available in all J:COM franchises, which pass 7.9 million homes.

    Zee Telefilms has already announced its plans to de-merge Siticable, a wholly owned subsidiary, into a separate company called Wire and Wireless (India) Limited (WWIL). This would bring specific focus into the cable business and be attractive to investors.

    Queried by Indiantelevision.com earlier as to whether he saw the demerged cable business (Siticable) and the direct consumer services business (Dish TV) as being the most likely to invite international interest for strategic and financial partnerships, Chandra had replied in the affirmative.

    HTMT is also planning to de-merge the company’s IT/BPO and media businesses into separate entities. “It couldn’t be done this year because of certain taxation issues. The programme is still alive and we hope to de-merge early next fiscal. A committee of directors are looking into the issue,” said Thiagarajan.

    When asked whether HTMT would de-merge after selling its stake in Hutchison Essar Ltd, Thiagarajan said he wouldn’t like to comment on the issue. HTMT, together with its wholly owned subsidiary InNetwork Entertainment Ltd, is holding 91.54 per cent of IndusInd Telecom Network Ltd (ITNL) corresponding to a 4.68 per cent effective stake in Hutch. HTMT plans to exit from the telecom business and sale out its entire stake before Hutchison Essar goes for an initial public offering (IPO).

    With Zee de-merging its cable subsidiary, foreign companies may now turn their eyes on WWIL. And with CAS rollout imminent, Liberty, Comcast and Time Warner Cable may seriously look at setting up a footprint in India.