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UK-based Ashmore Investment Management Ltd is picking up a 74 per cent stake in Broadband Pacenet, a Mumbai-based broadband services provider. |
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Earlier, Zee Group had agreed to buy out Pacenet but the deal did not conclude over differences in valuation. In May Jagjit Kohli, one of the three founder-promoters of Pacenet, quit Zee's demerged cable company Wire & Wireless India Ltd (WWIL) where he was the managing director. Broadband Pacenet will soon apply for FIPB (foreign investment promotion board) clearance. “We are making an application to FIPB for its approval to enable Ashmore take a 74 per cent stake in Broadband Pacenet,” says Kohli. The FIPB, in fact, has advised Broadband Pacenet to submit a revised proposal. This follows the new guidelines on ISPs (internet service providers) which allow a 74 per cent FDI (foreign direct investment) cap. Broadband Pacenet had earlier made an application to FIPB for a 100 per cent FDI clearance. |
| “We have been asked to amend our applications. According to the earlier guidelines, 100 per cent FDI was allowed to ISPs without gateway. We had submitted an application for a 100 per cent FDI enabling provision. But now there is an overall ceiling of 74 per cent FDI. We are making a fresh application to meet the regulatory requirement,” says Kohli.
Ashmore, a private equity firm which manages a $30 billion fund, is also taking a 49 per cent stake in Digicable Network (India), Kohli's cable TV venture along with partner Yogesh Shah. Digicable Network has already got approval from the FIPB for Rs 410 million. The total project cost, according to Kohli, is Rs 10 billion and the private equity firm has made a commitment to support the venture. |
Source: Indian Television