It will also make a payment of approximately Rs 544 crore to the Spice Group as non-compete fee. Idea and Telecom Malaysia International (TMI) along with their affiliates and associates would make an Open Offer for an additional 20 per cent stake in Spice with the price offered being Rs 77.30 per share, Idea stated in a release issued here this morning.
The Boards of Idea and Spice have also approved the merger of Spice into Idea through a Scheme of Arrangement under Section 391 to Section 394 of the Companies Act, subject to finalisation of the Scheme of Arrangement, the approvals of the respective shareholders, creditors and the respective High Courts of Gujarat and New Delhi, and TMI intends to support this merger. The swap ratio has been determined by M/s SSPA&Co, and M/s Khimji Kunvarji&Co at 49 shares of Idea for every 100 shares of Spice.
Idea would make a preferential allotment to TMI of 464.73 million equity shares at a price of Rs 156.96 per Idea share representing 14.99 per cent of Idea's equity capital post allotment.
Idea gains entry in the contiguous wireless markets of Punjab and Karnataka, which account for 11 per cent of India's total wireless subscribers.
Spice, a pioneering operator, delivers a strong running start in Punjab and Karnataka with 4.4 million subscribers as at 30 April 2008, equivalent to a 15.1 per cent market share in the two service areas.
Idea would consolidate its position with its all-India subscriber market share increasing from 9.5 to 11.1 per cent.
Importantly, Idea would be number one in three service areas, in the top three in five more service areas, and with a rapidly improving share in all its other operating service areas.
Idea's operations in the 900 MHz GSM spectrum band would increase from the current seven service areas to nine service areas, driving scale economies and operational synergies resulting in lower operating and capital expenditure.