Khaitan and Rajani advise on first foreign investor exit post SC judgment cancelling 122 licences in 2G scam Batelco sells stake in S tel for 175 million

Bahrain Telecommunications Co, Batelco has sold its entire 42.7 percent stake in in STel, an Indian mobile operator, to its local joint venture partner Sky City Foundation for $174.5 million (approximately Rs. 925 crore)..Khaitan & Co. advised Batelco with a team led by Partner Murali Neelakantan..Rajani & Associates advised Sky City Foundation with a team led by Managing Partner Prem Rajani..According to Dealcurry, the company had acquired the 42.7 equity in STel via two transactions in May and June 2009 for a total of $174.5 million..S Tel, incorporated on June 19, 2007, is a JV between the Siva Group and Batelco Millenium India Company, a subsidiary of Bahrain Telecommunications Company. S Tel obtained Unified Access Services Licences to operate in the six Category ‘C’ circles of Orissa, Bihar, Himachal Pradesh, North-East, Assam and J&K in January 2008. It has a total subscriber base of 3 million as on April 30, 2011..S Tel also has a ‘Category A’ All India ISP license. The company has signed an end-to-end telecom infrastructure agreement for telecom towers, transmission for BTS sites and fibre backbone for inter-city connectivity with major telecom infrastructure providers namely, Bharati Infratel, Reliance Infratel, Viom, Vodafone and Aircel..This transaction comes right the Supreme Court gave its verdict on one of the biggest corruption scandals in the country in which the Court has cancelled all the 122 telecom licenses issued on or post January 2008. Out of the 122 licenses, 21 belongs to Videocon, Uninor holds 22, Idea 9, Tata Teleservices 3, Swan Telecom 13 and Loop 21. Bar & Bench spoke to senior law firm partners in detail on the impact of the 2G judgment on foreign investors.