Spice chairman, managing director quit board (Lead)

June 25th, 2008 - 8:02 pm ICT by IANS  

Mumbai, June 25 (IANS) Spice Communications chairman B.K. Modi and managing director Dilip Modi resigned from the board hours after Idea Cellular’s announcement that it picked up a 40.8 percent stake in the company. As per the announcement this afternoon, Idea Cellular also said that it would merge with Spice Communications through a share swap arrangement, under which Spice shareholders would get 49 Idea shares for every 100 shares they hold.

In addition, Idea and Telekom Malayasia have joined hands to make an open offer for acquiring an additional 20 percent stake in Spice at Rs.77.30 per share. Telekom Malaysia holds 39.2 percent stake in Spice.

As a part of the merger , Idea will sell a 14.99 percent stake to Telekom Malaysia on a preferential basis at Rs.156.96 per share. Idea will also pay Rs.5.44 billion to Spice promoters as a non compete fee.

Negotiations were on between Idea, Telekom Malaysia and Spice for over a month.

Spice operates in Punjab and Karnataka, the two circles where Idea doesn’t have any presence.

Spice Communications currently has a subscriber base of more than four million, while Idea Cellular is the fifth largest operator in the country.

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