New Delhi, June 25 (UNI) Idea Cellular Ltd, part of Aditya Birla Group, today said it will buy 40.8 per cent stake in B K Modi-led Spice Communications Ltd for Rs 77.3 per share and it will make an open offer along with Telekom Malaysia International (TMI) to acquire an additional 20 per cent share.
Idea will merge Spice with itself through a share swap where Spice investors would get 49 Idea shares for every 100 Spice shares, and the company will pay Rs 544 crore to Spice Group as non-compete fee, it said in a statement.
Besides, Idea will make a preferential allotment to TMI of 464.73 million equity shares at a price of Rs 156.76 per Idea share representing 14.99 per cent of Idea's equity capital post allotment.
B K Modi will get Rs 2,700 crore for the 40.8 per cent stake sale and Idea is expected to launch people's phone priced at Rs 599, according to the reports.
With this acquisition, Idea will get entry in Punjab and Karnataka which account for 11 per cent of the country's total wireless subscribers and its all-India subscriber market share is expected to increase from 9.5 per cent to 11 per cent.
Aditya Birla group Chairman Kumar Mangalam Birla today outlined aggressive growth plans for Idea Cellular, saying that the Spice deal would push Idea into high growth trajectory ahead.
He said Idea has earmarked Rs 10,000 crore over the next two to three years for expansion plans. Idea would start operations in four new circles, including Mumbai and Tamil Nadu.
Idea Cellular Managing Director Sanjeev Aga said the company is looking at a six-month timeline for Spice delisting. Spice Communication would get delisted once the open offer is completed.
Idea will add about 4.5 million customers, closing in on Bharat Sanchar Nigam Ltd. India is projected by the telecom ministry to double its mobile-phone subscribers to 500 million in two years, after having surpassed the US as the second-biggest market this year.
Idea this year has been adding customers faster than larger rivals Bharti Airtel and Vodafone, according to data from the Telecom Regulatory Authority of India.
The combined entity will have about 30 million subscribers in the market of 269 million users.
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