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Mumbai, Sep 9: BPL Mobile in a statement on Tuesday said that it issued around 17% equity shares to a Mauritius-based company, owned by an international institutional fund investing in emerging markets.
A BPL Mobile spokesperson said that the company has raised about $80 million from this issue and the proceeds have been used for BPL Mobile’s expansion in Mumbai and its stake in Loop Telecom. Loop Telecom, a majority-owned subsidiary of BPL Mobile, recently got a pan-India mobile licence and paid a licence fee of Rs 1,400 crore. With an arbitration panel restraining Essar group from going ahead with any stake sale in Loop Telecom, BPL said in a statement, “This capital issuance was not in violation of the operative interim order of arbitrators.”
An arbitration panel on September 5 ordered Essar group to freeze the sale of any shares of BPL Mobile Communications, and its subsidiary Loop Telecom. The order puts constraints on BPL and Loop to dispense with their assets pending the arbitration outcome.
The order of the arbitration panels is a shot in the arm for Vodafone, the UK-based partner of Essar which controls BPL. Loop holds 21 mobile phone network licences.
Vodafone bought a controlling stake of 67% in Huchison Essar last year from Hong Kong’s Huchison for $11 billion. The Ruia family, owners of the Essar group retained a 33% stake in the JV, which was renamed Vodafone Essar. Following the deal, Vodafone got involved in a dispute between Hutchison and Essar over the ownership of BPL Mobile Communications. Essar group blamed Hutchison for missing a deadline for getting regulatory approval for buying out BPL Mobile as part of an earlier agreement. The matter was subsequently taken up by the arbitration panel.
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