Global Banking Corporation (GBCorp) on Wednesday signed an agreement with Batelco Group, Bahrain's leading telecom company, to acquire a 11 per cent stake in S-Tel, its Indian telecom venture with Siva Group.

Highlighting the strategic partnership, GBCorp vice chairman and managing director 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 Mena 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,' Al Jasmi said.

“We are delighted and welcome GBCorp as our investment partner in BMIC Limited, a company which will hold a 49 per cent stake in S Tel India, subsequent to GBCorp’s investment,” said 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,” Kaliaropoulos added.

“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,' the company chief said.
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'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,” Kaliaropoulos 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 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,” he added.

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,' Khan observed.

“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, Khan said, has a rich experience in the Indian telecom industry, with acknowledged in-depth management expertise and market reach to leverage on emerging opportunities.

“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 per cent of the area and 20 per cent of the population,” he added

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 added.-TradeArabia News Service