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Spice plans $2.5 B expansion, IPO by year-end
By agencies
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Tuesday, 05 September 2006, 19:30 IST
NEW DELHI: Spice Communications, a major player in the Karnataka and Punjab GSM circles announced a $2.5 billion expansion plan on Monday. To establish a pan-India presence, Spice is lining up an initial public offer (IPO) to raise close to $250 to $300 million before the year-end. JP Morgan, Deutsche Bank and Enam Securities have been appointed as merchant bankers for the IPO.
The first of the two planned IPOs will help the company offload up to 20% stake. Of the raised amount, $500 million will be used for upgrading its existing operations.
Chairman Dilip Modi said that the second round of the IPO, slated for December 07 would be floated subject to the availability of spectrum and grant of new licences. While the two floats will help the company raise about $650 million, the rest of the $2.5 billion investments will be raised through debt, equity and promoter funding.
To enable a pan-India footprint, Spice has applied for a unified access licence for 21 new circles. In addition, the service provider has applied for national and international long-distance licenses. Besides, Spice officials said that they will bid for BPLs Mumbai circle, which was recently bought over by Essar. There are talks of the latter selling the same.
"This growth plan has been carved out after the restructuring of the company and finalization of partnership between internationally renowned Telekom Malaysia (TM) and Indian partner MCorp Global. The financial restructuring has been finalized by the Development Bank of Singapore along with a consortium of several other leading International Banks," said a press release.
Apart from GSM services, Spice has its own brand of handsets in the market, along with value added offerings and organized mobile retail services. There has been an increase of 40 per cent in subscriber base over the last 12 months ending June 2006.
The company has a valuation of $1.2 billion (Rs 5,500 crore) at present, and is expecting it to surge to $4 billion by 2009, by when the planned pan India presence will be a reality.