MTNL close to buying Suntel

Indian telco Mahanagar Telephone Nigam Ltd (MTNL) is close to completing a purchase of Sri Lankan fixed-wireless operator Suntel, according to regional press reports. The NYSE-listed state-run operator has sent a high-level delegation to conduct due diligence on the company, which is a prerequisite to formalise the deal, company sources said. MTNL is believed to have emerged as the highest bidder for Suntel with a bid of between USD160 million and USD180 million. Colombo-based Suntel offers fixed line services based on CDMA WiLL technology, and claimed around 300,000 WiLL lines in service at the end of March 2007. All its key shareholders want to exit, sources said. Nordic telco TeliaSonera is Suntel’s top shareholder with a 55% stake via holding vehicle Overseas Telecom. The remaining shares are held by Sri Lanka’s Metrocorp, the National Development Bank of Sri Lanka, Townsend Ltd of Hong Kong and International Finance Corporation. MTNL’s only existing overseas telecoms venture is in Mauritius, where it offers fixed line and mobile services as Mahanagar Telephone (Mauritius). Three other bidders were previously reported to be in the final stage of the bidding process for Suntel: Malaysia Telekom, Sri Lankan blue chip conglomerate John Keells Holdings and another Indian telco, VSNL.