New Delhi: Bharti airtel is understood to have finally agreed to give dividend to its minority partner in Rajasthan circle, state-run TCIL, from next fiscal at the rate of 20 percent or equivalent to the amount it had given to its shareholders.
Bharti Hexacom, a joint venture between Bharti airtel and TCIL, offers mobile services in Rajasthan. Bharti owns 70 percent and the remaining 30 percent is with TCIL. The company offers mobile services in six north-eastern states (excluding Assam) and Rajasthan and has a little over 15 million customers.
Telecom Consultants of India (TCIL), according to sources, has asserted that Bharti should announce an interim dividend in lie of not declaring it in the last fiscal.
It was not possible to declare dividend for the last fiscal since all books of accounts for 2010-11 have been closed, audited and consolidated in the Annual Report of Bharti airtel and further circulated to shareholders.
TCIL has been demanding payment of dividend for last many years but the demand was not met as Bharti airtel has maintained that all profits are being ploughed back to expand operations in the circle.
"Since Hexacom is a debt-free company, its shareholders should be rewarded with a nominal dividend. We are in talks with Bharti airtel officials regarding payment of dividend to the shareholders. I think they will have to pay at least 20 percent as dividend which Bharti has given to its own shareholders," a senior Telecom Ministry official had said last month.
"For the year gone by that is 2010-11, Bharti airtel has recommended a dividend at the rate of 20 per cent i.e Re 1 per share," according to an internal note by the Department of Telecom (DoT).
Further, the letter said that appreciating the difficulties of declaration of dividend for 2010-11, TCIL considers that Bharti Hexacom may propose and declare interim dividend at 20 per cent of paid-up capital in the next meeting in lieu of non declaration of dividend for 2010-11 in addition to 20 percent dividend to be declared for the year 2011-12 at the end of the year.
"From the next financial year i.e 2012-13 onwards, TCIL proposes that subject to BHL's audited accounts confirming availability of divisible profits and approval of BHL's investment plan, not less than 2/3rd of the divisible profits for any year may be declared as dividend to shareholders subject to minimum of 20 percent of paid up capital," the note said.
Further, on the disinvestment of TCIL's equity stake in BHL, no final decision has yet been taken and various proposals including issuance of fresh shares are being discussed between the two partners.
First Published: Thursday, September 8, 2011, 18:48