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THE Sahara Group has picked up a 11.7% stake in S Tel, a Chennai-based telecom company that has licences to operate in several northern and eastern states, according to a report submitted by telecom regulator Trai to the government. The regulator had prepared a report on the ownership of all companies who were given telecom licenses last year following reports of stake sales by the promoters.
The deal can be worth around Rs 250 crore, if S Tel's stake sale to Bahrain Telecommunications earlier this year is taken as the benchmark. A Sahara executive who did not wish to be named confirmed that a group company by the name of Sahara India Investment Corp Ltd had picked up stake in S Tel and said that it was only a 'financial investment'. This executive, however, refused to divulge the deal size. The Sahara group spokesperson did not comment.

Earlier this year, Batelco Millennium India, a consortium formed by Bahrain Telecommunications and Dubai-based Millennium Private Equity had picked up a 49% stake in the company for about $225 million, which valued the company at about $450 million (Rs 2,250 crore). So far, private equity firms Skycity Foundations and Telecom Investments (Mauritius) were believed to be holding the remaining 51% stake in the company. The S Tel website lists these two PE firms as "copromoters" but does not divulge any additional details on them.

S Tel has Unified Access Services Licences - government parlance for telecom licences that allow wireline as well as wireless services in a service area - and start-up spectrum in Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, the North East and Assam. It also holds a Category A Internet Service Provider (ISP) licence that allows it to provide broadband services across the country. Last year, S-Tel attracted attention when it offered to pay Rs 13,752 crore to the government for a pan-India spectrum. Earlier in 2008, it was reported to have doubled the offer of revenue to the government for licences in all 22 circles for which it had applied for.

Recent news reports has also linked the telco with maverick investor C Sivasankaran who is reportedly looking to pick up a stake in the company. Mr Sivasankaran, a serial entrepreneur who sold his cellular services firm Aircel for $1.08 billion to Maxis Telecom at the end of 2005, was barred from buying more than 10% stake in any Indian telecom company as part of a non-compete agreement he had signed with the Malaysian company. But, this agreement ended at the end of March this year, enabling him to re-enter the sector.

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