Escorts cancels the board meeting.

NEW DELHI: Escorts has postponed its Monday board meeting that was to finalise the group”s move to sell off Escotel and exit the cellular business. The board will now meet on Thursday to decide whether to go ahead and close the deal with Idea or wait for the new spectrum policy and continue talks with Bharti in the hope of better value.Sources said the meeting was postponed because Escotel”s 49 per cent foreign partner, First Pacific of Hong Kong, would not be able to make it on Monday. Meanwhile, senior Escorts officials are likely to meet telecom regulator Trai within a couple of days to find out whether it would be worth their while to wait for the spectrum policy. Trai is working on the spectrum policy for cellular operators that would decide whether the entire spectrum of the purchased entity should remain with the merged entity. Government sources said the decision would be taken soon.Bharti operates in the circles that Escotel operates in — UP (West), Haryana and Kerala. Idea, on the other hand, is not present in these circles. “This is a big issue for the board and unless there is some assurance from Trai on it, the deal is almost done with Idea,” said one source. “It won”t like to get into a deal and see it get into policy and regulatory mess,” he said. “But, if Escorts gets the assurance before Thursday that the policy would let the merged entity keep the spectrum, then the game could change,” he added.Industry sources said Escorts might not like to wait for long in closing the deal because some of its officials believe that the enterprise value of Escotel, which is put at around Rs 1,000-1,100 crore, might not change much in the coming months. Escotel, with a liability of Rs 796 crore, has been looking for investors over the past couple of years but has not met with much success. It is not expected to jeopardise this one. Functionally, however, sources said that Bharti could be a better option because of it financial strength, operational efficiency and nation-wide presence. Others said meanwhile that Idea, which saw its merger move with BPL fail last year and is believed to have ‘very little promoter(s) aggression left”, could make a comeback with the deal. It is planning an IPO this year. “Idea”s strengthening will increase competition in the cellular industry. According to a source, if certain promoters decide to leave later, they might do so with good money. For Bharti, the acquisition would solidify its position as the leading GSM operator with 5.5 million subscribers.

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