Telekom Malaysia itching for more Spice

Telekom Malaysia might partner with strategic investors to increase their combined stake in Spice Communications to 74 per cent.The Malaysian giant has 39.20 per cent equity in the telecom company and foreign institutional investors hold 9.59 per cent, taking the total foreign holding to 48.79 per cent.The potential partners include United Arab Emirates’s largest telecom company, Emirates Telecommunications Corp (also known as Etisalat).

Spice, the regional wireless service provider, operates in the Punjab and Karnataka telecom circles and has a 2.2 per cent market share in the country’s total GSM space. Recently, it received licences to operate in four more circles -- Andhra Pradesh, Delhi, Haryana and Maharashtra -- but is awaiting additional spectrum.

Read more in The Business Standard article.

Spice to sell telecom towers to Srei

Mobile services provider Spice Communications is set to sell its tower arm to Srei Infrastructure. The deal is estimated to be worth around Rs 500 crore. Following the deal, the towers from Spice may be added to Srei’s subsidiary Quipo Telecom, a stand-alone tower company.

Spice has also said that it was availing loans for up to $400 million from Hong Kong & Shanghai Banking Corp and another $410 million from China Development Bank for expanding its networks in Karnataka and Punjab, the two circles where it currently offers mobile services.

Read more in The Economic Times article.

Spice Communications raises $128 mn from public issue

Spice Communications Ltd, an Indian mobile phone venture partly owned by Telekom Malaysia Bhd., raised Rs520 crore ($128 million) in an initial public offering as investors try to tap a market whose numbers almost doubled in 2006.

The Noida-based company priced the 113.1 million new shares at Rs46 apiece, the top end of a Rs41-46 range, according to an email sent to investors. The stock will trade on the Bombay Stock Exchange.

The mobile operator and larger Indian rivals, led by Bharti Airtel Ltd and Reliance Communications Ltd, are attracting investors trying to get access to the world’s fastest-growing market last year. Spice, which offers its services in the southern state of Karnataka and Punjab in the north, plans to spend $140 million during the next two years to boost coverage.

Last month, Spice sold stakes worth $10.1 million each to Lehman Brothers Holdings Inc. and Spinnaker, the company said.Enam Financial Consultants Pvt. Ltd and UBS AG arranged the Spice share sale.

Read more in The Livemint article.

Spice IPO sold 37 times, BEML offer on a roll

Investors’ interest in Spice Communications’ initial public offering (IPO) picked up on the final day backed by qualified institutional investors as the issue was subscribed 37.554 times. Suryachakra Power Corporation, which has two more days to close, is yet to impress investors.

The Noida-based cellular operator’s public issue of over 113 million equity shares, which opened for subscription on the Bombay Stock Exchange (BSE) on Monday, received over 4,247 million bids, according to the BSE website. The issue is priced in the band of Rs 41-46 a share.

The public issue of Suryachakra Power Corporation, which opened for subscription on Monday for selling 34 million equity shares, received bids for 79 per cent of the shares on offer. The company received a total of 26.802 million bids.

The qualified institutional buyers’ (QIB) portion was subscribed 1.5124 times, while the retail portion was subscribed 0.1142 times. The non-institutional investor portion has not got any investors so far. The price band for the issue has been fixed at Rs 17-20 a share.

Meanwhile, mining and construction equipment major Bharat Earth Movers’ (BEML) follow-on public offer (FPO) opened for subscription today. I-Sec is the lead banker to the issue. The issue has already been subscribed 1.02 times.

Spice Comm IPO opens today

Spice Communications Ltd’s initial public offer opens on Monday. The company is offering 11.31-crore equity shares of Rs 10 each through the 100% book building route. The price band has been fixed between Rs 41 and Rs 46 per share. The issue constitutes 16.39% of the fully diluted post-issue equity share capital of the company.

The book running lead managers to the issue are Enam Financial Consultants and UBS Securities India.The issue closes Friday.At least 60% of the issue will be allocated to qualified institutional buyers, up to 30% to retail investors and up to 10% to non-institutional investors.

The IPO proceeds will be mainly utilised towards repayment of debt, payment of license fee for national long distance and international long distance services and related capital expenditures. The funds will also be used for payment to vendors for network equipments and other capital expenditures.

The company recently concluded a pre-IPO placement of 2.4 crore shares at Rs 45 per share, raising about Rs 112 crore. Lehman Brothers and Sinnaker Investments have picked up a small stake in Spice Telecom.

Read more in The Economic Times article.

Spice fixes IPO price band at Rs 41-46

Cellular operator Spice Communications Ltd said on 19 June it has fixed the price band of its proposed public issue between Rs41 and Rs46 an equity share of Rs10 each.
“We have recently concluded a pre-IPO placement of 24,837,889 shares at Rs45 per share, thereby raising about Rs112 crore. A clutch of investors led by Lehman Brothers and Sinnaker Investments have picked up a small stake in Spice Telecom,” company chairman and managing director Dilip Modi told reporters at a press conference.

Following the IPO, the stakes of the both the promoters, B K Modi and Telekom Malaysia, would come down by 10% each.At present, B K Modi holds 51% and Telekom Malaysia, the remaining 49%.Post-IPO, Modi will hold 41% while Telekom Malaysia, 39%, with the public holding the remaining 20%.

Read more in The Livemint article.

Vulture funds' overtures to SMEs

Can the vulture nurture as well? Perhaps, it can. Distress asset funds (pejoratively called vulture funds) and distress asset arms of global hedge funds operating in India are increasingly beginning to focus on small and medium enterprises, a segment which is the preserve of commercial banks.

These funds are also looking at investing in third generation entrepreneurs, where a split in the family usually means that individual members have to raise capital for their expansion.

Over the past six months, funds specialising in distress assets like ADM, Clearwater, Citadel, Goldman Sachs Special Situations and DE Shaw have invested in such companies, say industry sources. For example, Spinnaker has invested in Spice Telecom and Clearwater in Sanghi Movers and earlier Diamond Cables.

Read more in The Economic Times article.

Idea, Spice Tele may call off deal

Idea Cellular and Spice Telecom might call off their proposed merger talks. The two companies were unable to come to terms on the valuation, and also on the future structure of the management to run the merged entity.

According to a source close to the development, Spice Telecom will go ahead with its planned initial public offering (IPO).

“The deal seems to be off, at least for the moment. Valuation is believed to be key issue, while differences in sorting out of management and operational issues of the joint company also played a part,” the source told Business Standard today.

Spice Telecom, which has received approval from the Securities and Exchange Board of India, would go ahead with its Rs 600 crore IPO.

The combined entity would have had a market share of over 11 per cent in the mobile space. However, even after the merger, the company would remain the fifth largest mobile operator in the country-far behind Bharti, Hutch, BSNL, Reliance and Tata Teleservices.

Read more in The Business Standard article.

Spice awaits IPO before deciding on merger with Idea

It is learnt that Spice Telecom may be in talks for a possible merger with Idea Cellular. Spice Telecom has revenues of Rs 1000 crore and has been valued between Rs 4500-5000 crore.

Spice Tele has 2.8 million shareholders and operates in two circles - Punjab and Karnataka.

At this point of time, it might make sense for Idea to make the move, as it is a nine-circle operator and might want to expand its India footprint. Also, getting new spectrum might take longer. So, the move makes perfect sense and is the fastest way for Idea to expand.

BK Modi, Chairman of Spice Tele said that at this point they were not in merger talks, but confirmed that there was a proposal for a merger with Idea. Currently, they were concentrating on their IPO, after which merger talks might resume. Meanwhile, Sanjeev Aga, Managing Director, Idea Cellular said that he had "no comment" to make.

Spice Tele's IPO was to float in June-July this year.

Spicy deal: Spice, Idea now talk merger

A major consolidation in the telecom sector could be on the cards. Discussions have just begun between Spice Telecom and Idea Cellular for a possible merger, whose outcome can go either way.

According to top sources, the option of both Spice buying out Idea Cellular as well as the Birlas-owned Idea Cellular buying out Spice are being considered. However, with talks being in the preliminary stages, a source said it would take anywhere between 8 and 12 months before anything could be finalised.

Adding a new dimension, sources told ET that Telekom Malaysia, which holds 49% in Spice Telecom (the BK Modi group holds 51%) is keen to expand its footprint in India and make some acquisitions to expand Spice’s operations. This is because Spice, at present, is limited to just two telecom circles, Punjab and Karnataka.

Last year, Telekom Malaysia had acquired 49% in Spice for $179 million (Rs 733 crore). In June 2005, Telekom Malaysia and Singapore Technologies Telemedia had opted out of the agreement for acquiring a 47.7% stake in Idea Cellular for about $390 million as the government did not clear the deal.

Read more in The Economic Times article.

Videocon to invest $1.5 b in China

Ten Indian companies, including consumer durable major Videocon would invest $5 billion in setting up manufacturing units in China. Videocon alone would invest $1.5 billion in a liquid crystal display (LCD) product manufacturing unit in Shenzhen.

The other Indian companies to have signed a memorandum of understanding (MoU) with their Chinese counterparts include ZTE Telecom India, Spice Communications, International Certification, AKS Associates, Cosmos Industries, Maharasthra Industrial Development Corporation, Rajasthan Industries Development Corporation and Unity Power.

These MoUs were signed on Tuesday in Beijing. Videocon MD Rajkumar Dhoot on Tuesday signed an MoU with the China Council for Promotion of International Trade (CCPIT) chairman Wan Jifei for the proposed plant in China. Industry body Assocham has sent a 35-member business delegation to Beijing to discuss business possibilities with CCPIT.

Spice to sell 48 pc stake to MCorpGlobal

Mobile operator Spice Telecom's manufacturing arm Spice Ltd is going to sell its 48.23 per cent stake in Spice Systems Ltd (SSL) to B K Modi-controlled MCorpGlobal for Rs 10.59 crore.

The Board of Directors of Spice Ltd in a meeting held on March 31 approved the sale of 81.50 lakh shares, constituting 48.23 per cent holding in SSL, at Rs 13 per share, the company informed the BSE.

No other details of the deal were immediately made available in the communique to the stock exchange.Spice Ltd (formerly known as Spice Net) manufactures servers, PCs and other equipments while Spice Systems (SSL) is engaged in office automation.