Indian Rayon buys Cingular stake in Idea

Indian Rayon, a part of the Aditya Birla group, today announced acquisition of a 16.45 per cent stake in Idea Cellular from Cingular Wireless of the US for $150 million (nearly Rs 660 crore).

This acquisition enhances Indian Rayon's stake to 20.74 per cent and that of the Aditya Birla group's to 50.15 per cent. The Tata group is the other shareholder of Idea Cellular.

Following an abortive attempt of Idea to sell 47.7 per cent stake to a strategic partner, the Aditya Birla group and the Tata group had some time ago announced that they would buy Cingular Wireless's holding in Idea. The attempt to sell 47.7 per cent stake - a combination of Cingular's 32.9 per cent, Aditya Birla group's 6.7 per cent and Tata group's 8.3 per cent - to Singapore Technologies Telemedia Communications Ltd (STT) and Telecom Malaysia International Sdn Bhd (TMI) failed to get government approval.

Indian Rayon, which would be rechrishtened as Aditya Birla Nuvo after the proposed merger of Birla Global and Indo-Gulf Fertilisers with itself, would be the growth vehicle of new-age business of the Birla group.

Aditya Birla group chairman Kumar Mangalam Birla today said, "Mobile telephony would be one of the exciting sectors in the economy in the coming decade, and Idea is the most attractively positioned within the sector."

Sources in the know of the situation said Indian Rayon was raising a 5-year loan of Rs 750 crore to fund the buyout stake in Idea. Tatas would raise the funds through Tata Industries, they added.

The Tatas have own their brand of mobile service "" Tata Indicom brand "" that uses CDMA technology. Idea Cellular has 57 lakh subscribers.