Financial Daily from THE HINDU group of publications
Friday, Aug 20, 2004

Cross Currency

Group Sites

Home Page - Regulatory Bodies & Rulings
Info-Tech - Telecommunications

Hutch's Aircel buy hits DoT hurdle — Clarification on equity structure sought

Thomas K Thomas

New Delhi , Aug. 19

HUTCH plan to acquire Aircel Cellular may have hit a minor bump with the Department of Telecom seeking clarification on the equity holding structure of the acquiring company.

According to senior officials in DoT, clarifications were required since Hutch had sought to acquire the C. Sivasankaran-promoted company through its sister concern Aircel Digilink.

"We have asked the company to give us the details of the equity holding before we can give the approvals," said a DoT official. Industry sources privy to the deal, however, told Business Line that discussions were on between Hutch and DoT to sort out the snag. They said that all clarifications were being given and the acquisition would be completed as per DoT guidelines on intra-circle mergers and acquisition.

The problem had arisen because Hutch chose to acquire the Chennai-based mobile company through one of its subsidiaries Aircel Digilink rather than merging it with its existing mobile services subsidiary in Chennai -Hutchison Essar South Ltd.

According to sources, there was no clarity on whether the approvals were required under the intra-circle merger guidelines or under the inter-circle acquisition norms.

In June, Hutch had announced the acquisition of Aircel from Sterling Infotech, which operates cellular services in Chennai and Tamil Nadu circles. Market sources put the deal amount between Rs 1,200 crore and Rs 1,600 crore, making it the largest single telecom deal in the country.

It was an all-cash deal. Other operators including Idea Cellular and Bharti Tele-Ventures were also in the fray to acquire the company.

While Aircel has a subscriber base of 3.4 lakh in Chennai, Hutchison Essar has 2.1 lakh users. If approved, this will be the first intra-circle merger transaction since the announcement of the intra-circle merger guidelines.

Hutchison hopes to integrate the two networks in Chennai as one (Aircel) operates on the 900 MHz frequency and the other (Hutchison Essar) on the 1,800 MHz frequency.

More Stories on : Regulatory Bodies & Rulings | Telecommunications | Mergers & Acquisitions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
`Govt to take more fiscal measures to ease inflation'

Phosphoric acid shortage may force fertiliser units to cut production
Britannia finds outsourcing a cheaper option
'No clear leader in low-cost services delivery'
Sensex up 85.37 on all-round buying
Hutch's Aircel buy hits DoT hurdle — Clarification on equity structure sought
India Inc gears up to face truckers' strike
Zee recreates the Birla will drama

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line