NEW DELHI, INDIA: Norwegian telecom major Telenor which has recently expressed interest in bidding for the upcoming spectrum auction is planning to acquire Loop Mobile. The two companies are in active discussion over this buy out and the Norwegian firm could announce this development anytime during the spectrum auction, a source having direct knowledge of the affair said.
'The discussion between the two firms is at the advance stage and they could announce this anytime during the auction process,' he said.
Though the exact valuation of the deal is not yet confirmed, but sources said it could be between $500 to $600 million. Dubai based Khaitan Group, the owner of the Mumbai based telecom firm has appointed Standard Chartered as Loop's financial adviser for the deal.
The Norwegian firm has applied to participate in the upcoming spectrum auction through Telewings Communication Services, a new firm incorporated in April this year by Telenor with a paid up capital of Rs 100 crore.
As per the new guidelines, a foreign entity is eligible to participate in the spectrum auction, provided it acquires a UASL license through an Indian firm. They can do so by forming a new Indian company or acquire an Indian firm.
'A Unified Licence (Access Services) can only be awarded to an Indian Company. Hence, any foreign applicants will need to form or acquire, an Indian company, to obtain a Unified Licence (Access Services),'the eligibility criteria says.
According to the source who is a senior executive in one of the firms in review and has direct knowledge of the deal said that Telenor would acquire Loop Mobile which is operational in Mumbai circle only. Loop mobile's subsidiary Loop Telecom was granted 21 licenses during 2008 which were subsequently canceled by Supreme Court in February this year. It had only 6000 to 7000 subscribers where as Loop Mobile has more than 3 million subscriber base. It had started operations as BPL mobile in 1995 and rebranded as Loop in 2009.
Though Loop's 21 licenses were canceled by Supreme court this year, the company did not intend to apply for new licenses and stayed away from the auction process.
'Khaitans want to exit the telecom business completely,'the source added.
Telenor which has recently got its stake back from Uninor, its joint venture with Indian realty firm Unitech, is putting things in place to port its existing user base to Loop's network. "The integration process is already underway and it could take another three to four months to complete it," the executive added. Uninor was also a victim of the scam riddled license allotment happened in 2008 and all its license were canceled by the apex court. Post the cancellation of licenses nothing went well between the Indian realty firm and Telenor, however, both the parties have reached upon a settlement early this month and Unitech sold its entire stake to the Norwegian telecom firm. Uninor was a 67-33 per cent joint venture between Telenor and Unitech, and post the settlement Telenor would transfer the entire business to a new entity.
http://www.ciol.com/Mobility/News-Reports/Telenor-in-advanced-talks-to-acquire-Loop-Mobile/166353/0/
'The discussion between the two firms is at the advance stage and they could announce this anytime during the auction process,' he said.
Though the exact valuation of the deal is not yet confirmed, but sources said it could be between $500 to $600 million. Dubai based Khaitan Group, the owner of the Mumbai based telecom firm has appointed Standard Chartered as Loop's financial adviser for the deal.
The Norwegian firm has applied to participate in the upcoming spectrum auction through Telewings Communication Services, a new firm incorporated in April this year by Telenor with a paid up capital of Rs 100 crore.
As per the new guidelines, a foreign entity is eligible to participate in the spectrum auction, provided it acquires a UASL license through an Indian firm. They can do so by forming a new Indian company or acquire an Indian firm.
'A Unified Licence (Access Services) can only be awarded to an Indian Company. Hence, any foreign applicants will need to form or acquire, an Indian company, to obtain a Unified Licence (Access Services),'the eligibility criteria says.
According to the source who is a senior executive in one of the firms in review and has direct knowledge of the deal said that Telenor would acquire Loop Mobile which is operational in Mumbai circle only. Loop mobile's subsidiary Loop Telecom was granted 21 licenses during 2008 which were subsequently canceled by Supreme Court in February this year. It had only 6000 to 7000 subscribers where as Loop Mobile has more than 3 million subscriber base. It had started operations as BPL mobile in 1995 and rebranded as Loop in 2009.
Though Loop's 21 licenses were canceled by Supreme court this year, the company did not intend to apply for new licenses and stayed away from the auction process.
'Khaitans want to exit the telecom business completely,'the source added.
Telenor which has recently got its stake back from Uninor, its joint venture with Indian realty firm Unitech, is putting things in place to port its existing user base to Loop's network. "The integration process is already underway and it could take another three to four months to complete it," the executive added. Uninor was also a victim of the scam riddled license allotment happened in 2008 and all its license were canceled by the apex court. Post the cancellation of licenses nothing went well between the Indian realty firm and Telenor, however, both the parties have reached upon a settlement early this month and Unitech sold its entire stake to the Norwegian telecom firm. Uninor was a 67-33 per cent joint venture between Telenor and Unitech, and post the settlement Telenor would transfer the entire business to a new entity.
http://www.ciol.com/Mobility/News-Reports/Telenor-in-advanced-talks-to-acquire-Loop-Mobile/166353/0/
