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Siva Cries Foul Over Maxis' Plans To Sell Aircel Stake

19 August, 2008

C Sivasankaran, who has made fortunes buying and selling Indian companies, cannot be taken in for a ride so easily. But he alleges he is being shortchanged. The NRI businessman is all set for arbitration with Malaysian telecom operator Maxis. He had sold his telecom firm Aircel to Maxis-Apollo combine in 2006. This follows a claim by Sivasankaran that Maxis is trying to sell its stake in Aircel to another firm even as it owes additional payment to the NRI businessman.

According to a report in Mint, the two sides are likely to enter arbitration proceedings in Singapore within four weeks.

Sivasankaran had sold his 100 per cent shareholding in Aircel Cellular to Maxis and its local partner, the Reddy family that runs Apollo Hospitals, for $1.08 billion in cash two years back. The deal included the mobile service provider for Chennai, the rest of Tamil Nadu and operations in northern and eastern parts of India.

Sivasankaran’s counsel claim that the deal assured additional payout linked to 26 per cent of Aircel’s market value upon its stock exchange listing, which was originally planned for 2008. This was to be based on the difference between the agreed per-share price in 2006 and the six-month average trading price after listing. The other option was to pay Sivasankaran based on Aircel’s EBITDA.

The NRI businessman claim that Maxis is in talks with foreign telecom firms such as AT&T to sell its stake in Aircel. Such a move could create complications over the liability to make the balance payment to Sivasankaran.

Maxis denies any talks with AT&T, as reported in the press valuing Aircel at $5-6 billion. Aircel runs mobile phone services in 10 Indian circles or licensed areas serving some 11.5 million customers. The firm plans to roll out services in 13 other areas in two-three years for which it received licenses in January.

Sivasankaran and Maxis are already facing each other in the courts. Maxis had given an undertaking to the Madras high court that the company had no plans to sell its stake to any third party. The submission was made after Siva Ventures filed a petition asking the court to stop any possible stake sale in Aircel.

 


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Siva Cries Foul Over Maxis' Plans To Sell Aircel Stake

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