Spice Mobiles Merges With Its Parent Company

In a significant move to consolidate its telecom business The Spice Group announced the merging of its mobile retail business Spice Televentures with the handset division Spice Mobiles.The merger would create a new entity, named Spice Mobility. This is seen as part of a plan to consolidate the group’s telecom businesses.

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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.

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. The remaining one crore would be kept for the employees.

The fund raised would be used to support company’s growth plans in Middle East, Africa and ASEAN countries. Furthermore, the group is looking forward to consolidate the three businesses – devices, retail and VAS through this merger.

You may recall that the group’s retail arm Spice Retail and value-added services business, Spice Digital are operated by Spice Televentures. As per the March quarter shareholding pattern available on the BSE, Spice Televentures Pvt Ltd held 63.25 per cent stake 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.

One Response to “Spice Mobiles Merges With Its Parent Company”

  1. February 6, 2012 at 2:22 pm #

    GY UIDDF

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