Spice Mobility to raise Rs 300 cr, merge two group firms

NEW DELHI: Spice Mobility aims to raise Rs 300 crore by selling 32 million treasury shares, a top official with the company said on Tuesday.

The BK Modi-promoted group had earlier announced that it would be merging Spice Televentures, an unlisted telecom unit into Spice Mobiles, its handsets division.

“Spice Mobile is undertaking the process of reverse merger with Spice Televentures to form Spice Mobility and this will lead to 42 million treasury shares of which 10 million will be kept for employees and the rest sold,” chairman BK Modi said in Delhi.

Mr Modi said that the reverse merger will result in a cash flow of Rs 300 crore through sale of treasury shares which would be used to fund both the expansion of its mobile retail outlets and acquire smaller firms in the value added services (VAS) space.

Edelweiss is advising the Group on the merger and consolidation plan.

“We expect all the clearances to come in by September and by October the (treasury) shares should be available in the market, Mr Modi said, adding: ”Post integration, we will focus on handsets, VAS and retail chains. So any acquisition that is of the right valuation , we would look at it.”

He also said that it would not be possible to put a number to the retail outlets the group planed to set up. It currently operates about 750 retail outlets. ‘Our focus will be the metros and big cities such as Ahmedabad, Bangalore and Hyderabad,” Mr Modi added.

The Spice Group also runs another value added services firm called Spice i2i in Singapore.

“Our firm, Spice i2i, listed on the Singapore Exchange and we are in the process of raising $133 million through a rights issue. As a group, we are cashrich and with more funds coming in, we are adequately equipped for our growth plans,” Mr Modi said.