No Plans To Sell Stake To Third Party: Maxis

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No plans to sell stake to third party: Maxis

11 Jul, 2008, 2231 hrs IST, PTI

CHENNAI: Malaysian-based Maxis Communications, which holds 74 per cent stake in Aircel Cellular Ltd, on Friday submitted before the Madras High Court that it had no plans to sell its stake to any third party across the globe.

The above submission was made before Justice Chitra Venkataraman after Siva Ventures Limited, another stakeholder of Aircel, filed a petition, seeking to restrain Maxis from selling its stake to any other party.

Recording the submission, the judge observed that the court does not find any necessity to consider the petition praying for an interim injunction.

Siva Ventures in its petition, quoting media reports and other industry sources, had submitted that Maxis was discussing a sale of 74 per cent of its stake in Aircel to US telecom giant AT&T, which was detrimental to the interests of the company.

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Maxis, Siva take Aircel dispute to arbitrators

18 Jul, 2008, 0117 hrs IST, ET

MUMBAI: Malaysian telecom operator Maxis Communications and serial entrepreneur C Sivasankaran are going in for arbitration over Indian telco Aircel, which the Chennai industrialist had sold to Maxis in January 2006 at an enterprise value of $1.08 billion.

The Sivasankaran camp has alleged that Maxis is exploring stake sale in Aircel in violation of share purchase agreement by Maxis. The development will all but end US major AT&T’s hopes of buying into Aircel to get a toehold in the red-hot Indian mobile phone market as the Sivasankaran camp contents that Maxis is entertaining AT&T in violation of a three-year lock-in period as per the agreement.

The arbitration will take place in Singapore, a venue mutually agreed to go to in case of any legal dispute when Mr Sivasankaran sold Aircel stake to Maxis in January 2006, sources said. “Arbitration proceedings are expected to begin in the next four to five weeks. Both the sides will appoint their arbitrators, who will, in turn appoint the third arbitrator. The three-member panel will resolve the matter,” a source said.

Mr Sivasankaran could not be reached for comment while Maxis CEO Sandip Das did not return calls made on his mobile.

Last week, Maxis had given an undertaking before Justice Chitra Venkataraman of the Madras High Court that it will not sell stake to any party across the globe. This was done after a petition was filed by Siva Ventures, the original shareholders of Aircel, seeking to restrain Maxis from selling equity in Aircel to any third party.

The cumulative effect of initiation of arbitration and the undertaking given to the Madras High Court is that Maxis will not be able to sell stake in Aircel in the foreseeable future.

In April this year, USA’s AT&T approached Maxis for a possible stake purchase in Aircel, which has 12 million subscribers across 10 circles in India with around 4% market share. The Malaysian telecom giant was learnt to be negotiating sale. “There was a lock-in period for Maxis, which it has not adhered to by entertaining talks for sale within three years of buying the equity. This is a violation of the agreement,” a Siva Ventures insider said.

Sources also said Mr Sivasankaran could be having the right of first refusal in case of sale by Maxis. However, since contents of the agreement could not be independently verified by ET, it is not known if these are the issues behind invoking the arbitration clause.

Aircel is the latest in the list of telecom companies locked in arbitration. While BPL Mobile (offering services in Mumbai) is the bone of contention between Vodafone and joint venture partners Ruias of the Essar Group, the Birlas and Tatas are in arbitration over Idea Cellular.

Arbitration is a technique for dispute resolution outside the courts, wherein the parties refer it to one or more persons (the arbitrators) by whose decision they agree to be bound. Maxis has an overall equity interest of 74% in Aircel. While it holds 65% stake directly, its joint venture company with the Reddy family of Apollo Group holds the remaining 35%, giving Maxis an overall equity interest of 74%.

While Maxis is offering services in 10 circles, it has also received start-up spectrum in the rest of the circles and hopes to be a pan-India player by the end of this year. Aircel, which has invested $2 billion in operations till now, has 6,000 base stations and aims to double revenues to join the $1-billion club this year.