 Online edition of India's National Newspaper Thursday, Jun 26, 2008 ePaper | Mobile/PDA Version |
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Kumar Mangalam Birla NEW DELHI: Idea Cellular, the fifth biggest mobile operator in terms of subscribers, will acquire 40.8 per cent in Spice Communications for over Rs. 2,700 crore. This deal will give Idea Cellular, having over 2.6-crore subscribers in 11 circles and another 44-lakh subscribers of Spice Communications in Punjab and Karnataka circles. “Spice group’s investment vehicle, MCorpglobal Communications Pvt. Ltd. (MCPL), holding 40.8 per cent in Spice Communications, will divest its entire holding to Idea Cellular at a price of Rs. 77.30 a share. MCPL will receive an additional payment of Rs. 543.97 crore from Idea Cellular as non-compete fee,” Spice group said in a statement. This acquisition, which will be completed by December, is being seen as yet another step towards consolidation of the one of the world’s fastest growing mobile markets where over 80-lakh subscribers are being added every month. Through the deal, Idea Cellular will get hold of crucial spectrum. Spice Communications has recently been awarded licences for operations in four more circles including Delhi, Tamil Nadu and Andhra Pradesh. The ‘Spice’ brand will be phased out over six months in the two circles. In a statement, Idea Cellular said it would now make a preferential allotment to Telekom Malaysia International (TMI) for 15 per cent stake in the merged entity. In Spice Communications, TMI held 49 per cent which translated into a five per cent corresponding stake in the merged entity. After the preferential offer, the stake of TMI in the merged entity would be 20 per cent. “The entry of the Malaysian telecom giant in Idea Cellular will help the company turn debt free. The preferential allotment to TMI will result in an inflow of about Rs. 7,200 crore, and thus resulting in a cash accrual of Rs. 4,500 crore which will help the company become debt free,” said Idea Cellular Chairman Kumar Mangalam Birla.
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