Maxis bids adieu to 2005 with Aircel buy

CHENNAI: Malaysia-based Maxis Communications and the Chennai-based Reddy family have together acquired Aircel, the cellular operations of the C. Sivasankaran-promoted Sterling group.

According to a Maxis press release, Maxis will form a joint venture with the Reddy family to invest together $1.08 billion (Rs 4,860 crore) of which $280 million (Rs 1,260 crore) will be injected into the company as cash.

This implies a pre-money equity valuation of $800 million (Rs 3,600 crore) for Aircel, according to the release. Maxis will hold 65 per cent equity stake in Aircel directly while the joint venture will hold the balance 35 per cent.

Maxis will ultimately own 74 per cent of Aircel's equity, the maximum allowed under present Indian laws in the telecommunications sector.

The transaction would be in two independent stages: A subscription to about 6.3 crore new equity shares (26 per cent of the expanded capital) for Rs 1,260 crore and the second (subject to necessary approvals), a purchase of all the existing equity shares held by Aircel Televentures Ltd, 74 per cent for Rs 3,600 crore.

The second transaction would be subject to shareholders' approval and Indian regulatory approvals.

The joint venture will be an Indian company owned by Maxis and its Indian partner in a ratio that will give "Maxis overall equity interest in Aircel of 74 per cent."

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