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Birlas to recast telecom business
By siliconindia
Bangalore: Aditya Birla Telecom (ABTL), a subsidiary of Idea Cellular, will soon demerge the licence for Bihar and Jharkhand circle and merge it with the parent company.
ABTL has already filed for a 'scheme of arrangement' with the Bombay High Court. Idea CFO Akshay Moondra confirmed the development. "We are doing it to consolidate all operations under Idea Cellular. Now that Spice merger is coming to a close, we thought we should do this circle also," he told Economic Times.
The aim is to make Idea Cellular the umbrella company for telecom operations, holding licenses for all the 22 circles, a source familiar with the exercise said. "This will give Idea Cellular a direct control over all the licenses across India and help improve its valuation," said another official who is not authorized to speak to the media.
Recently, the group announced plans to put its entire cement business under UltraTech. Under the plan, the cement business of Grasim is being demerged into a wholly-owned subsidiary which will eventually be merged with UltraTech.
Punjab and Karnataka circles, which came in with the acquisition of Spice Communications, will come into Idea's fold by the end of this year. The companies have received almost all the regulatory clearances for that merger. The only remaining circle then was Bihar and Jharkhand.
The license for Bihar and Jharkhand was obtained by the AV Birla group through ABTL because the erstwhile joint venture partners, Tatas, also held the license for that circle. Subsequently, after Tatas exited, ABTL became a subsidiary of Idea Cellular.
The entire exercise around restructuring of licenses is expected to be over by this year-end. After this, ABTL will be left with 16 percent stake in Indus Towers, the three-way JV between Bharti Airtel, Vodafone Essar and Idea Cellular.