Sri Lanka Telecom sale gets cabinet ok; next step management deal

May 25, 2007 (LBO) - Prospective Malaysian shareholders of Sri Lanka Telecom are seeking wide-ranging management control to purchase a 25 percent stake currently owned by Japan’s NTT through a shareholders' agreement being negotiated among the three parties. Watertight

Sources familiar with the deal's provisions claimed it could also undermine telecom regulation in the future because it prevents a universal service obligation being imposed on SLT and has provisions to protect its dominance in international telephone services.

In many countries regulators have asked incumbent operators to provide services in rural areas even when those are commercially unviable in exchange for tax payer funded investments and subsidies incumbents have enjoyed in the past.

Full provisions of the proposed shareholders agreement may never be known by other SLT shareholders and stakeholders since it also contains confidentiality clauses barring such disclosure.

SLT shares have been subject to feverish speculation since NTT confirmed that Usaha Tegas Sdn, controlled by oil, gas and gambling tycoon Ananda Krishnan, had been invited to study the books for a possible sale. Majority government owned Sri Lanka Telecom’s strategic partner NTT will retain a s

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