Telekom Malaysia to buy 49% in Spice

Posted on | February 28, 2006 |

ET reports that Telekom Malaysia will take a 49% stake in Spice Telecom, with BK Modi retaining his 51% controlling interest.

Telekom Malaysia will be buying out Ashmore Investments and Deutsche Bank’s stake in the company, who had picked up the strategic stake held by Singapore-based Distacomm.

With the company’s net valuation pegged at roughly $400m, the cash transaction to the two exiting stakeholders could hover around $200m. Spice carries a debt burden of around $200m. It operates in Punjab and Karnataka circles and has 1.7m subscribers.

Telekom Malaysia has investments in Indonesia, Thailand, Singapore, Cambodia, Sri Lanka, Bangladesh and Pakistan. The deal with Spice will provide the India entry strategy for Telekom Malaysia, which tried, but was unsuccessful in acquiring a stake in Idea Cellular in the wake of regulatory issues.

The deal comes within a month of another Malaysian telco Maxis buying a majority stake in Tamil Nadu’s Aircel.

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