The Hindu Business Line : Vodafone Essar seeks FIPB nod for investment in tower co

New Delhi, May 14 Vodafone Essar Ltd has sought Foreign Investment Promotion Board (FIPB’s) approval for investment in Vodafone Essar Infrastructure Pvt Ltd (VEIPL), its proposed wholly owned subsidiary to provide tower infrastructure services in telecom sector.

At present, within an overall direct foreign holding in Vodafone Essar Ltd (VEL), Essar (Mauritius investors) holds 6.19 per cent, while the holding of Vodafone International Holdings BV (through Mauritius investors) stands at 42.34 per cent.

In addition, there is a total indirect foreign investment of 25.09 per cent – Essar Telecom Investments Ltd (15.85 per cent), Omega Telecom Holdings Pvt Ltd 1.96 per cent, Telecom Investments India Ltd and its subsidiaries (7.28 per cent). Thus, the total direct and indirect foreign investment in VEL adds up to 73.62 per cent.

“VEL plans to establish VEIPL, a wholly owned subsidiary, as an infrastructure provider (category I) in the telecommunication sector. VEIPL had applied to Department of Telecom for registration required to operate as an infrastructure provider.

DoT, in January 2008, informed VEIPL that it should obtain the approval of the FIPB. The DoT has cited Press Note 3 (2007 series), which deals with enhancement of the FDI ceiling from 49 per cent to 74 per cent in the telecom sector,” sources said.

Indus infratel

The company has further said that VEL proposes to hold about 42 per cent equity interest on Indus Infratel Ltd. “Indus has been established with a nominal share capital and VEL currently holds 42 per cent of such nominal share capital. It is contemplated that Indus would operate as an infrastructure provider in the telecommunication sector. Indus has received IP-1 registration from DoT in January 10, 2008,” sources said adding that the proposal came up for discussion at the last FIPB meeting.