Tuesday, March 1, 2016

Proposed Mobitel-Hutch deal

From Ceylon Today - By Ishara Gamage
Ceylon Finance Today: The government has decided to temporally halt the Mobitel-Hutch deal until a fresh valuation is made, the government three-member tender board head and Power and Energy Ministry Secretary Dr.Suren Batagoda told Ceylon FT .
"We have advised the government Technical evaluation committee to obtain a fresh independent valuation because previous valuations were controversial," he said.


It was learned that the global accounting giant KPMG and Ernst & Young both valued Hutch at between US$ 122.5 to 123 million.
But Sri Lanka Telecom trade unions alleged that Mobitel officials are willing buy Hutch at a much higher price.
Meanwhile, Batagoda said it will take another two or three months to complete this fresh valuation.


Government has already appointed a three-member tender board to oversee the Mobitel-Hutchison deal.
The three-member government tender board is headed by Power and Energy Ministry Secretary Dr.Suren Batagoda, Telecommunication and Digital Infrastructure Ministry Secretary Wasantha Deshapriya and Posts Ministry Secretary Wimalasiri Perera,
United Kingdom-based mobile virtual network operator Lycamobile has also offered US$ 123 million to buy Hutchison Telecom Lanka, but there offer was rejected, Telecommunication and Digital Infrastructure Minister Harin Fernando earlier told Ceylon FT.
"Too many operators are bad for the industry, that is why the Telecommunications Regulatory Commission (TRC) rejected the Lycamobile proposal," the Minister said.


But a Lycamobile official said, "We were having a memorandum of understanding (MoU) with Hutchison parent company to buy its Sri Lankan operations for US$ 123 million.
Our MoU is still valid and our request for approval from TRC in this regard is still pending without TRC having had made a final decision," one of Lyca mobile's local representatives who previously headed a leading government institution under the former regime told Ceylon FT on conditions of anonymity.
"Depending on this valuation we have bid US$ 123 million for Hutchison Telecom Lanka, If the government is not allowing us to proceed with this deal then we are considering to invest this money in some other country," he said.
The source said that Lycamobile intention is to bring some foreign direct investments to Sri Lanka and Hutchison is their worldwide telecoms partner.

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