Vavasi to approach BSNL for due diligence of Zain

Vavasi group, a New Delhi firm with diverisifed interests, on Wednesday said it would approach government-owned BSNL and MTNL to join in doing due diligence of Kuwait's Zain Telecom.

Vavasi's claim comes amid reports that the PSUs are unlikely to be its consortium partners for the proposed deal. "We are going to do the due diligence on Zain Telecom from next week. We will write to BSNL and MTNL to take part in the process along with us," Vavasi managing director Farid Afruddin told PTI.

BSNL CMD Kuldeep Goyal was not available for comment. Asked if both the PSUs don't respond to his calls, Afruddin said "we are keeping all options open," indicating the company would try to rope in other Indian private telecom operators to acquire the 46 per cent stake of the Kuwait firm.

He said Vavasi had signed a transaction agreement with Zain Telecom on September 8 and one of the terms of the agreement was to find a telecom operator for which they approached BSNL and MTNL. The agreement period lasts till the 'early part' of January, he said.

As part of the deal being discussed, Zain shareholders will sell a 46% stake to the consortium at 2 dinars ($6.97) a share. The total deal size is estimated at $13.7 billion, which BSNL has already termed as "appear to be expensive".

Asked to comment on this, Afruddin said the accurate valuation can only be known after the due diligence.  The company website says Vavasi is a multi-faceted group with diverse interests, including telecom and Renewable Energy.

The company had applied for a pan-India licence to offer mobile services in the country. The application was filed on October 1, 2007, and the licence is yet to be granted.

Earlier BSNL chairman Goyal had said the PSU could start direct talks with Zain once the exclusive talks period between both vavasi and Zain ends.