Maxis rules out fresh funds for Aircel

Maxis Communications Bhd has no intentions to invest in Aircel any amount other than the $280 million it provided during the time of the Indian company's acquisition.

"It is true that Aircel needs funds but we do not foresee us injecting more money into Aircel to fund the 12 circles. We injected $280 million into the company last week," Maxis CEO Datuk Jamaludin Ibrahim told Malaysia Star, a newspaper in that country, in an interview.

Aircel, according to sources, is planning to expand its operations to 12 circles from the present 10. In total, the country has 23 circles. The proposed expansion will make the Chennai-based company a pan-India player.

Jamaludin said Aircel was expected to launch mobile telephony services in the remaining areas by the end of the year.

But, if the Chennai-based cellular player secures rights to more circles, a "further cash injection from Maxis will be reviewed", he has said.

On December 31, Aircel had acquired 64 per cent direct and 9 per cent indirect stake in Aircel for $1.08 billion.

Of this, $280 million was provided as cash to Aircel that was to be used for its expansion plans. The cost of equity in Aircel, which controls over three per cent of Indian cellular market, was fixed at around $800 million.

Maxis has used its own cash to fund the $280 million capital injection and is due to "finalise the funding requirement for the remaining $800 million in one to two months," the newspaper quoted Jamaludin as saying.

Aircel began offering cellular services three years ago in Tamil Nadu and Chennai, which is the third largest market for mobile telephony after Mumbai and New Delhi.

On further expansions and mergers, he said: "We are not opposed to mergers or ruling out more acquisitions in India. We want to be a long-term player and have a sizeable investment in India,'' Jamaludin said.

"Aircel is very nimble, has a low cost of operations and its approach is very local. Our plan is to continue with that strategy. We do not intend to impose what we have done right in Malaysia but what we can do is add value in three areas - technology, product development and branding," he said.