Maharashtra Telephone Nigam (MTNL) is planning to put its $180 (approx Rs.882 crore) acquisition of Sri Lanka-based telecom company Suntel on hold.

The decision has been taken due to the ongoing credit crunch and the Sri Lankan company’s reluctance to close the deal. Apart from this, the consultant appointed by the PSU had failed to find a JV partner that was needed to hold a 50 per cent stake in Suntel. As per the proposed deal structure, MTNL wanted to limit its stake in Suntel to 50 per cent.

At present the PSU is concentrating its cash reserves on rolling out 3G networks across the metro cities of Mumbai and Delhi. The company is investing upwards of Rs.500 crore for its 3G rollout.

In early 2008, MTNL had outbidded other companies including Telekom Malaysia and Sri Lankan firm John Keells Holdings to emerge as the highest bidder for Suntel.