Spice Communication large block deal

Spice Communication rose 0.62% to Rs 73.40 at 11:38 IST on BSE after a massive block deal of 28.23 crore shares was struck on the counter at Rs 77.30 per share in early trade on BSE, amounting to a sizeable 40.8% stake of the company changing hands.

The stock hit a high of Rs 77.30, also its all time high. The stock touched a low of Rs 72.85 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.

India's fifth-largest mobile operator Idea Cellular today mopped up 40.80% equity stake in Spice Communications through the bulk deal executed on BSE. BK Modi group was the seller. Earlier in June 2008, Idea had said it would buy 40.8% stake in Spice for Rs 2,176 crore.

Idea Cellular, the fifth-largest mobile operator in terms of subscribers 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. It will also pay additional Rs 544-crore as non-compete fee. The deal would catapult Idea Cellular's spectrum on 900 Mhz band. The long-drawn acquisition will give Idea straightaway two existing circles of Punjab and Karnataka with a subscriber base of 4.4 million. Idea is present in 11 circles and has a customer base of over 26 million.

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.