The sale must be carried out to obtain the best possible price, CCEA said. According to a statement issued by the government, for disinvestment from BHL, TCIL shall initiate process for appointment of advisors, legal advisors and valuers shortly. The company shall give a global expression of interest, inviting sale of stake through a two-stage bidding processes -- technical and financial bid. Under the two-stage bidding procedure, only participants who clear the technical bid would be considered for the financial bid. TCIL would then take a call on the stake sale after consulting the Department of Telecom, as well as the department of economic affairs.
Expressing its operational problems with Bharti, which TCIL has listed as its sole reason for exiting the venture, a statement issued by the government said, TCIL sought a dividends pay-out while adopting annual accounts every year, but this was not agreed to by the Bharti Group on the ground that BHL was using all its internal generations for expansion of network to keep pace with the intense competition in the market. TCIL has neither received any return on its investment nor has an effective say in the company. TCIL sought a listing of BHL so that they could exit at the buoyant prices of mobile companies prevalent in India. This was also declined by Bharti Group on the ground that their flagship company, Bharti Airtel Ltd, is already listed and their policy does not permit subsidiaries being listed.
Bharti, which holds 70% stake in BHL, had offered TCIL a price of Rs 263 crore for its 30% stake in BHL. The proposal was, however, rejected by the government since the offer price was considered too low for TCIL then. Compared to a flat 2005, the companys revenue and subscriber base have increased significantly. For instance, BHLs subscriber base has gone up seven times and the top line as well as the bottom line has increased over 400%. BHL had one million customers in 2005-06, Rs 393 crore in revenues and Rs 83 crore as profit. Last year, the company clocked a turnover of Rs 1,345.8 crore and net profit of Rs 330.7 crore.