Global Banking Corporation B.S.C. [C] [GBCORP] and Batelco Group, the Bahrain based leading regional telecommunications operator, have taken the first step forward in a strategic partnership for the acquisition by GBCORP of an 11% stake in S-Tel, India - a joint venture telecom company, established between the Batelco Group and the Siva Group, India.
Highlighting the strategic partnership, GBCORP Vice Chairman & Managing Director, Mr. Abdul Rahman Mohammed Al-Jasmi, said: “We are greatly pleased to partner with the Batelco Group in their joint venture telecom project in India. While 2009 has been a challenging year, because of the turbulent economic times, we have nevertheless been able to turn these challenges into opportunities. Batelco has an excellent record of accomplishment in establishing a footprint across the region, with operations in seven markets across the Middle East, North Africa and now Asia. The partnership with Batelco is a significant measure of our way forward strategy of building investment bridges through strategic partnerships, identifying new investment opportunities and diversifying our investment portfolio. ”
“We are delighted and welcome GBCORP as our investment partner in BMIC Limited, a company which will hold a 49% stake in S Tel India, subsequent to GBCORP’s investment” stated Peter Kaliaropoulos, Group Chief Executive of Batelco. “Effective partnerships with other telecom operators and strategic investors have been a successful formula, as we are expanding into new markets” added Mr Kaliaropoulos.
“We value GBCORP’s tremendous investment banking expertise and vision to team up with the Batelco Group and participate in diversifying its investment base, creating value from growth opportunities in India - one of the fastest growing telecom markets in the world” he added.
“Our investment in S Tel India is part of Batelco’s growth and expansion strategy in wireless and broadband markets. We explored a number of investment opportunities in India and S Tel was judged to be the most suitable investment for Batelco's entry into the Indian telecommunications market and it fits with our long term plans to diversify our geographical footprint and dramatically increase our scale," he said.
“We are very pleased with S Tel’s achievements to date. Since launching operations in December, S Tel has already acquired more than 300,000 customers from its launch in just three services areas out of six. Together with our investment partners, GBCORP and the Siva Group, we aspire to make S Tel a leading and formidable operator in India’s rural sector” added Mr Kaliaropoulos.
Ahmed Al Khan, Senior Executive Director, Head of Investment Banking at GBCORP, said: “As an investment bank, our first priority is to ensure that any investment opportunity conforms with our stringent risk mitigation parameters and due diligence measures. Our key focus has been in identifying and addressing the key risk quadrants, ie compliance, operational, financial and strategic, thereby ensuring the ideal synergy in terms of partnerships and at the same time, adhering to the prescribed financial investment model to ensure sustainable cash flows.”
“I am satisfied that S Tel addresses these key risk parameters. GBCORP and Batelco have developed an optimum synergy, capitalising on our inherent investment banking expertise and Batelco’s track record of acquisitions in the regional market and sound operating and technical know-how. The Siva Group in India has a rich experience in the telecom industry in India, with acknowledged in-depth management expertise and market reach to leverage on emerging opportunities.”
“We have been very conservative in our business projections and are very encouraged by the fact that STel has, in the weeks since it commenced operations in December 2009, already established a healthy subscriber base of over 300,000. This is anoutstanding achievement by S Tel, in such a short period of time and exceeds all our expectations. This also reinforces the accuracy of our projections and validates our business strategy.”
“This investment initiative is part of our overall diversification strategy of broadening our investment portfolio into the lucrative private equity market in new and emerging markets of the world.” “In terms of the telecom market in India, the next significant growth area is the potential C Circle, comprising India’s North East region, which covers 26% of the area and 20% of the population.”
“Subscribers in this segment will account for 35-45% of the total subscriber base by 2012, making it one of the fastest growing telecom market segments. We are privileged to be part of this strategic partnership between the Batelco Group and the Siva Group.”
Mr Al Khan concluded by saying that India is an important investment destination. “We believe the rapid strides in the Indian telecom sector, facilitated by liberal policies of the Indian Government and GBCORP’s strategic partnership with Batelco, have opened up a window of opportunity for GBCORP in the telecommunications sector in India.”
Finalisation of GBCORP’s investment is subject to preconditions, including approval of Foreign Investment Promotion Board (FIPB) of Government of India. S Tel was established, to gain entry into the rapidly growing mobile markets of North East and North West India. S Tel will focus on delivering innovation and value and aspires to grow rapidly to respond to the needs of these largely untapped areas.
Vaidyanathan Srinivasan Group CEO of Siva Group said that S Tel has Unified Access Services Licenses to operate in six Indian circles — Orissa, Bihar, Himachal Pradesh, North-East, Assam and Jammu & Kashmir and commenced operations in December 2009 in Orissa, Bihar and Himachal Pradesh. “The strategic partnership with the Batelco Group and a strong investment bank, such as GBCORP, will enable S Tel to make significant strides into the telecom market in India.” he emphasized.
