A team from Telekom will meet Idea officials in Mumbai on Friday Telekom Malaysia will hold talks with its Indian joint venture partner Spice Communications and A V Birla group company Idea Cellular, which is looking to buy out the promoters' stake in the latter, to negotiate a stake sale plan.
A team of Telekom Malaysia officials will meet US-based billionaire B K Modi and officials of Idea Cellular in Mumbai on Friday, a top official at Spice Communications said.
Spice Communications founder B K Modi is keen to sell the family's 40.80 per cent stake to fund new businesses. Telekom Malaysia has first right of refusal. There are three options that Spice Communications is exploring. One, a merger with AV Birla group company Idea Cellular, wherein both Spice Communications and Idea Cellular will be joint partners, while Telekom Malaysia will continue hold a stake in the venture. At present, Telekom Malaysia holds a 39.2 per cent stake in Spice Communications.
Another option is to permit Telekom Malaysia raise its stake in Spice Communications to 74 per cent. Even though, Idea Cellular will have no role to play in this deal, the Modi family will sell around 14 per cent stake and retain a 26 per cent stake.
Telekom Malaysia, South Asia's second largest telecommunications company, was looking at increasing its stake in the Indian GSM company to around 74 per cent. The third option before Spice Communications is to acquire Telekom Malaysia's 39.2 per cent stake in the joint venture company. The Modi family is keen to buy out the 39.2 per cent.
The Modi family expects Telekom Malaysia to put in a proposal for increasing its stake in the company.
Spice Communications Chairman BK Modi declined to comment but added that the company was 'exploring all options, including stake sale.'
Idea Cellular Managing Director Sanjeev Aga and AV Birla group spokesperson also declined to comment.
BSE-listed Spice Communications offers GSM services in two circles -- Punjab and Rajasthan -- under the brand name Spice Telecom. It was recently awarded licences in four additional circles -- Andhra Pradesh, Haryana, Delhi and Maharashtra. The company has over 4.2 million subscribers across these circles.
