Dhoots to buy Nahata's 36% in Datacom

A long-running tussle between the Dhoots of the Videocon Group and Mahendra Nahata of Himachal Futuristic Communications over their telecom joint venture Datacom is nearing an end, with Mr Nahata agreeing to sell his 36% stake to the Dhoots for around Rs 1,200-1,300 crore, two persons familiar with the negotiations told ET. A settlement will allow the Dhoot family, which owns the remaining 64% stake in the company, to bring in a strategic partner to bankroll the company’s pan-India rollout plans, said the two persons, asking not to be named, as they were not authorised to speak about it.

Datacom, which has licences to offer services in all telecom circles except Punjab, has engaged Morgan Stanley to find a strategic partner. The company was one of the nine firms to get telecom licences early last year. The deal will also involve HFCL Infotel’s telecom operations in Punjab being merged with Datacom. But Mr Nahata will not get any additional cash consideration for HFCL Infotel, as its over Rs 400-crore debt will be transferred on to the books of Datacom. The figure could not be independently verified by ET.

When contacted, Mr Nahata and Videocon chairman Venugopal Dhoot denied they had reached an agreement. “It’s status quo. There is no agreement and no negotiations between us. We will soon launch pan-India services. We have no knowledge of HFCL Infotel, nor did we have any discussion with anybody as regards that business. There is no new development,” Mr Dhoot said, in reply to a detailed query. Mr Nahata also said the “situation continues to be as it was” and added he was not exiting the company. However, one person familiar with the negotiations insisted a deal had been reached and would be announced soon.

The second person also confirmed that an announcement was imminent and the deal value would be pitched around $250-270 million. One of India’s top law firms is drafting the settlement between the two partners. The negotiations between Mr Nahata and the Dhoots have been deadlocked for a year now, with Mr Nahata demanding Rs 2,116 crore for his stake. Last year, he had rejected an offer by the Dhoots to buy him out for Rs 1,360 crore.