Telecom Lead India: British telecom major BT has sold its 9.1 percent stake in Tech Mahindra for Rs 1,011.4 crore.
In August 2012, BT sold 14.1 percent stake to institutional investors for about Rs 1,395 crore.
The exit from the Indian IT services firm is a significant move for the British giant. It is looking at expanding in the U.K. market. In the last two quarters, BT struggled to maintain its earlier revenue growth.
The company’s second quarter revenue is down 9 percent to £4,474 million. Profit before tax of BT grew 7 percent to £608 million. BT has passed more than 12 million premises with its fiber broadband. Take-up is growing and it achieved around 190,000 connections in the quarter, with over 950,000 premises now connected.
Tech Mahindra remains a key supplier to BT. BT says the financial impact of the disposal is expected to be treated as an income statement specific item in its next financial results.
“BT (British Telecom) has completed the sale of its remaining 9.1 percent shareholding (11.6 million shares) in Tech Mahindra to institutional investors for total gross cash proceeds of Rs 1,011.4 crore (GBP 115.7 million) at Rs 871 per share,” said BT in a statement.
BT had set up the technology outsourcing firm in joint venture with Mahindra & Mahindra in 1986. The British company had around 30 per cent stake in Tech Mahindra initially.
In 2010, BT Group had sold 5.5 percent stake in Tech Mahindra to Mahindra and Mahindra (M&M).
In the year ended 31 March 2012, BT Group’s revenue was 18.8 billion pound with profit before taxation of 2.4 billion pound.
Recently, TelecomLead.com reported that BT has reduced its Capital expenditure by 9 percent to £596 million in second quarter of 2012 from £652 million in the same quarter last fiscal. In H1 2012-13, telecom Capex of BT reduced 1 percent to £1.2 billion.