BackSpice Televentures to merge into Spice Mobiles
Spice Televentures to merge into Spice Mobiles
PremiumExpanding avenues: Spice Group chairman B.K. Modi. One reason for the merger is to shift the firm’s focus to mobile Internet. Harikrishna Katragadda / Mint
New Delhi: Spice Televentures Pvt. Ltd (STPL) will be merged into Spice Group’s listed firm Spice Mobiles Ltd in a bid to raise capital and shift the group’s focus to mobile Internet, a meeting of the two boards has decided.
The directors of the two firms also proposed that the merger be effective from 1 January 2010, and the merged entity be called Spice Mobility Ltd. The date is subject to approval from shareholders, authorities and the courts.
Spice Mobile is listed on both the National Stock Exchange and the Bombay Stock Exchange.
“The merger will create greater financial depth and ability to raise capital," said B.K. Modi, chairman, Spice Televentures.
“One of the main reasons for the merger is to shift the focus of the group on mobile Internet, which has a greater potential than voice (telephony) as it is cheaper than voice," he added.
The two boards also proposed a major restructuring after the merger. The board for the new entity will include B.K. Modi as chairman, Dilip Modi as vice-chairman and managing director, Divya Modi as finance director and Preeti Malhotra as director and company secretary.
Audit firm BSR and Co. has carried out an independent valuation of Spice Mobiles and Spice Televentures. Spice Mobiles’ shares have been valued at Rs109 apiece, while the share of Spice Televentures have been fixed at Rs862 per share. A swap ratio has been advised according to this valuation.
The boards have accepted the swap ratio of 7.91 shares of Spice Mobiles for every one share held in Spice Televentures. As a result, 163.4 million equity shares will be issued to the shareholders of Spice Televentures.
The existing shares of Spice Mobiles held by STPL will be extinguished. The equity capital of the company after the completion of the merger will be 19.09 crore equity shares of Rs3 each.
shauvik.g@livemint.com
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
