The Sivasankaran Group is open to renegotiating a settlement with its erstwhile joint venture partner Batelco after a London Court ruled in favour of the Bahrain telecom company last week. The renegotiation could include re-offering Siva Group’s shares in Tata Teleservices (TTSL) with a fresh deadline.
A senior executive of the Sivasankaran Group told Business Line , “We are always open to discussing the issue with Batelco. We have never denied the liability. There was only a 45-day delay in executing the agreement to transfer TTSL shares but they chose to go to court. We are ready to re-open discussions.”
“We are also looking at legal options,” the executive added.
A London court has ordered the Siva Group to pay $185 million in addition to $30,000 per day from November 1, 2012 as part of an agreement between the two sides signed in 2011.
According to the London Court order seen by Business Line , Batelco had picked 42.7 per cent stake ion Siva Group-promoted S Tel Pvt Ltd. At that time, it was agreed that that Batelco was entitled to exercise the put option in the event of a ‘liquidity event”. This included failure by S Tel to secure debt finance for $103 million or an event that threatened the licences granted to S Tel by Indian Government.
Option agreement After the 2G scam came out in the open, Batelco decided to exercise the put option. But Sivasankaran claimed that the Option Agreement was given as a “personal guarantee” after Batelco’s Chairman persuaded him on grounds that it would “be purely cosmetic and symbolic and for optical purpose and that he would never call on it.” Meanwhile, in June 2011 the two parties commenced negotiation to settle the put option dispute. The essential shape of the deal was that Batelco reserves the right to sell its S Tel shares to Siva for $174.5 million but Siva was given the right to settle its obligation either in cash or by transferring 79 million shares held by Siva Group in Tata Teleservices.
TTSL shares at that time encumbered and Siva was given 11 months to remove the encumbrance. If the encumbrance were removed in time, the S Tel shares would be sold for $174.5 million and transferred by Batelco to a Siva company and Batelco would purchase TTSL shares also for $174.5 million. A deadline of October 31, 2012 was set to complete both the deal after which Batelco was free to terminate the deal and claim $174.5 million in cash.
In late August 2011, Siva tried to improve the deal from his point of view by making it conditional on Batelco agreeing to purchase an additional $125 million worth of TTSL shares. Batelco refused and it looked that negotiations had broken down. Meetings to find a solution were held on October 18 and 19 where Siva proposed that the two deals should be interlinked. Since a share swap would need the approval of the Foreign Investment Promotion Board, Batelco insisted that the two deals be de-linked.
TTSL purchase pact Dismissing Siva’s position, the Royal Courts of Justice in London said that Siva Group did not seek to complete the TTSL purchase agreement before the deadline and Batelco was never called on to pay for the shares. This is the second major setback for the Siva Group. Earlier a tribunal in Singapore had turned down a $423-million damages claim made by C. Sivasankaran, through his company Siva Ventures, in the Maxis-Aircel case.