Mobitel- Hutch deal to clear a price hurdle
View(s):Regulatory clearance for the Mobitel- Hutch deal has still not been given due to disagreement by top authorities in the purchase price although the transaction has been finalised, official sources revealed.
Mobitel (Pvt) Ltd, the fully-owned subsidiary of Sri Lanka Telecom (SLT), had completed due diligence to buy Hutchison Telecommunication Lanka to further expand its coverage countrywide, a source told Business Times.
However the Treasury has expressed its reservationson the purchase price which was agreed upon by Mobitel- and Hutch after finalizing terms and conditions, he disclosed.
The Mobitel’s bid was US$132 million, $32million higher than the ceiling of $100 million and the Treasury has objected to it, he added. Dialog is learnt to have offered $78 million to buy Hutch.
SLT sources said that the acquisition of Hutch would increase the number of its base stations to 8,000 from 5,500 at present and Mobitel’s subscriber base will also increase to 6 million from its present 5 million.
When contacted over the phone, CEO of Mobitel Kapila Chandrasena said that he was at a meeting and could not make any comment on the deal. An influential young government politician is said to be behind the deal and negotiation process.