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British Telecom is set to exit Accel Frontline Ltd, a Chennai-based IT company, in which it has 51 per cent stake. It is reliably learnt that the formal bye-bye deal will happen in a few days.
The British telecommunications major ended up with 51 per cent (1.15 crore shares) in the Rs 330-crore Chennai-based IT company in May 2007, when it took over Accel Frontline's erstwhile partner, Frontline Technologies of Singapore.
Accel Frontline, listed on the NSE and the BSE, provides a bouquet of IT-related services, including systems integration, embedded software, remote infrastructure management service, warranty management service and IT-training. It has been promoted by Mr N.R. Panicker, a first generation entrepreneur and a former employee of HCL Technologies.
Frontline Technologies of Singapore company itself had come into Accel, when it bought some stake in the company from ICICI Ventures, which had entered Accel in 1999. Later, Frontline Technologies picked up additional equity and had 42 per cent stake in Accel Frontline, at the time when it was taken over by British Telecom.
When it thus entered the Chennai company, British Telecom expressed a desire to own 51 per cent. In deference to this, Accel Ltd, the Indian holding company of Accel Frontline Ltd, sold 9 per cent stake to British Telecom, at Rs 120 a share.
Back then, Accel Frontline coming under BT was hailed as an epochal moment in its history and it was believed that it would be swamped in a wave of businesses brought in by BT.
That it did not happen is, apparently, the reason why the joint venture partners are parting ways. It is not clear as to why BT could not bring in businesses into a company it owns 51 per cent of, but sources say that the recession of 2008 has something to do with it.
While the exact price at which BT is selling back its stake to the Indian partner is not known, sources close to the deal put it at between Rs 45 and Rs 50. The deal size, therefore, works out to around Rs 50 crore.
On the BSE today, the Accel Frontline share closed at Rs 45.55.
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