Spice Group rejigs telecom biz; merges handsets arm with retail
The Spice Group today consolidated its telecom business by merging its mobile retail business Spice Televentures with the handset division Spice Mobiles.business Updated: Jun 29, 2010 20:08 IST
The Spice Group Tuesday consolidated its telecom business by merging its mobile retail business Spice Televentures with the handset division Spice Mobiles.
"Spice Mobiles will reverse merge with Spice Televentures and the new venture will be called Spice Mobility," Spice Group chairman B K Modi told newsmen in New Delhi.
The reverse merger will result in a cash flow of Rs 300 crore (through sale of treasury shares) and will be utilised for financing expansion of its mobile retail outlets in the country as well as acquisitions.
"(Post-merger) we would focus on handsets, VAS and retail chains. So any acquisition that is of the right valuation, we would look at it...It is difficult to quantify the number of outlets that we are looking at, but we would focus on seven cities,"Modi said. Apart from the four metros,the other cities include Ahmedabad, Bangalore and Hyderabad, Modi informed.
The merger will result in 4.2 crore treasury shares, of which 3.2 crore will be placed in the market, helping the company raise about Rs 300 crore, Modi explained.
On the group's overseas plan, Modi said, the company is focusing on the Middle East, Africa and ASEAN countries for growth.
"We have another firm Spice i2i, listed on the Singapore Exchange, which will raise USD133 million through a rights issue. As a group, we are cash-rich and with more funds coming in, we are adequately equipped for our growth plans," he said.
He further said the merger move will help the group consolidate the three businesses-- devices, retail and VAS--and focus on bringing in innovation in the mobility space.
"We expect all the clearances to come in by September and by October the (treasury) shares should be available in the market. We should be able to raise about Rs 300 crore," Modi said.
Spice Televentures currently operates the group's retail arm, Spice Retail (the erstwhile Hotspot) and value-added services business, Spice Digital.
As per the March quarter shareholding pattern available with the BSE, Spice Televentures held 63.25 per cent in Spice Mobiles.
Edelweiss is advising the Group on the merger and consolidation plan.
The Spice Mobiles counter closed at Rs 71 on the BSE, down 1.05 per cent on a day when the broader index Sensex shed 240 points.