Spice Communication soars on stake sale to Idea Cellular

Spice Communication surged 30.63% to Rs 71.05 at 11:29 IST on BSE after Idea Cellular said it will buy 40.8% stake in the company at Rs 77.30 a share.

The stock hit a high of Rs 72, also its 52-week high. The stock touched a low of Rs 52 so far during the day. The stock had hit a 52-week low of Rs 23.25 on 22 January 2008.

The mid-cap telecom services provider has an equity capital of Rs 689.92 crore. Face value per share is Rs 10.

Meanwhile, shares of Idea Cellular were up 6.25% at Rs 105.35.

Idea Cellular said it would merge Spice with itself through a share swap whereby Spice shareholders would get 49 Idea shares for every 100 Spice shares held. Idea also said that it would make an open offer for additional 20% stake to Spice Communicaton shareholders at Rs 77.30 a share.

Telekom Malaysia, which holds 39.3% stake in Spice, will get 14.99% stake in the merged entity. Idea will make preferential allotment of 46.47 crore equity shares or 14.99% stake at Rs 156.96 each to Telecom Malaysia.

Spice Communications reported a net loss of Rs 36.50 crore in Q1 March 2008 as compared a net loss of Rs 14.67 crore in the Q1 March 2007. Net sales rose 38.70% to Rs 299.82 crore in Q1 March 2008 over Q1 March 2007.

Spice Communications has licences to operate in six of India's 23 telecom circles but a paucity of spectrum, or radio airwaves to transmit the wireless signals, means it cannot immediately start services in all of them. It has operations in Punjab and Karnataka. The company also provides Internet telephony, Internet services and broadband services.