India’s Economic Times is reporting that all of the country’s key government ministries have given their approval to a proposal filed by the Department of Telecommunication (DoT) on behalf of the state for the sale of its 30% stake in Bharti Hexacom, a subsidiary of mobile operator Bharti Airtel. The government holds a stake in Hexacom through Telecom Consultants of India (TCIL), and Bharti Airtel currently runs its operations in six states through the subsidiary; Hexacom is responsible for around nine million subscribers. The regulator is now expected to seek formal approval for the plans from the Union Cabinet. TCIL has tried to exit the operator once before, in 2005-06, but the sale was halted after it claimed the INR2.63 billion (USD59.7 million) price offered by Bharti Airtel for its 30% stake was too low. It is understood that the government’s decision to sell its stake is prompted by two factors; the decision by Bharti Airtel not to list the subsidiary; and the refusal of Bharti group to issue annual dividend payments.
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