Sistema Walks Away from Talks to Buy Stake in India's Aircel
Published on: 13th Feb 2013
Note -- this news article is more than a year old.
Russia's Sistema and Malaysia's Maxis have reportedly cancelled plans that could have seen the Russian firm taking a large stake in India's Aircel after they were unable to agree on a price to pay.
Sistema is looking for an alternative route back into the Indian market should the attempt by its local subsidiary, MTS India to regain its cancelled licenses fail. However, the lack of interest and lowering of the reserve fee for radio spectrum in the country has also opened up the possibility for MTS India to bid for fresh spectrum on its own.
Before the talks broke down, it had been suggested that Sistema would buy a large stake in Aircel, which is majority owned by Maxis, in a deal reputed to be worth around USD3 billion.
An unnamed source told the Times of India that the term for which Maxis would stay invested in Aircel was a sticky subject in the negotiations.
Despite the widespread reports of talks, dating back to last September, both companies again denied that any talks were taking place.
A potential hurdle to any deal would also have been the limit on a company with a majority stake in one phone network owning more than 10% in another. This may be evaded by merging the two companies or structuring the deal so that it comes into effect if/when MTS India is closed down.
Aircel, with 65 million customers is currently 74% owned by Malaysia's Maxis Communications. There have been allegations in the past that Maxis' effective holding in the company could be as high as 99.3% thanks to irregular preference shares held in the other shareholders.
On the web: Times of India