Financial Daily from THE HINDU group of publications
Saturday, Dec 31, 2005
Financial Daily from THE HINDU group of publications Saturday, Dec 31, 2005 |
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Corporate
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Mergers & Acquisitions Info-Tech - Telecommunications Third attempt by Sterling group to sell mobile biz Our Bureau
Chennai , Dec. 30 THE deal signed today with Maxis Communications Berhad of Malaysia is the third attempt by the C. Sivasankaran-promoted Sterling Infotech group to sell its mobile telephone business. In June 2004, it signed an agreement with Hutchison Essar, a leading mobile operator, to sell the operations in Chennai and Tamil Nadu circles. This did not get the required approvals in time and both the companies decided to call off their deal in March 2005. In the meanwhile, Sterling had signed an agreement with AFK Sistema, a Russian conglomerate with interests in mobile telephony, to sell a 49 per cent stake with an option for the Russian company to increase it to 51 per cent. At that time, Government regulations permitted a foreign ownership of up to 49 per cent only. However, this deal too did not fructify. Since then, there have been numerous reports in the media that the company has been discussing with various strategic partners to offload a part of its stake. This deal with Maxis and an Indian partner is subject to regulatory approvals. From information filed by Maxis Communications with Bursa Malaysia, the Malaysian stock exchange, it is gathered that the three Sterling group companies - Aircel Ltd, Aircel Cellular Ltd and Dishnet Wireless Ltd - had combined revenues of Rs 734.80 crore for the year ending March 31, 2005 and profit after tax of Rs 156.40 crore. According to a press release issued by Maxis, Aircel's mobile revenues accounted for Rs 549 crore and profit after tax of Rs 112.50 crore for the year ended March 31, 2005. It is understood that Maxis will retain the Aircel brand name, at least for the time being. The new owners, as and when the deal is completed, will bring in a new chief financial officer and also appoint two directors to the board. Maxis has said it intends to actively seek synergies between its Malaysian, Indonesian and Indian operations given the potential scale of the combined businesses.
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