MTNL seeking partner for Sri Lanka Suntel buyout: Indian regulator

India's Mahanagar Telephone Nigam Ltd (MTNL) is looking for a joint venture partner to take up a 50 percent stake in Sri Lanka's Suntel which it is negotiating to buy, India's telecom regulator has said.

The Department of Telecom (DOT) said in its annual report that MTNL wanted a joint venture partner to retain the independence of the profitable Sri Lankan firm.

"As the target company is being run by highly-skilled professionals, to maintain its existing structure with regards to human resources and other policies, MTNL has in principle decided to limit its stake to 50 percent and is in talks to find suitable partners," the department said of MTNL in its annual report for 2007-08.

MTNL said it has been short-listed as the preferred bidder to acquire Sri Lanka's Suntel, which has some 300,000 customers.

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MTNL close to acquiring Lanka outfit

MTNL is close to buying Sri Lankan fixed-line operator Suntel and has sent a high-level delegation to start technical assessment of the company.

The delegation has left for Sri Lanka to hold discussions with Suntel on technical assessment, which is a pre-requisite to formalise the deal, company sources said.

The delegation will be in the country for four days to conduct due diligence along with Suntel officials, they said. MTNL is believed to have emerged as the highest bidder for Suntel with a bid of between $160 million and $180 million.

If the deal goes through, this will be the NYSE-listed company’s first acquisition. It will also give MTNL a foothold in Sri Lanka’s fast-growing telecom market.

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