Sterling, Hutch call off Aircel deal

Sterling Infotech and Hutchison Essar have terminated the agreement for the acquisition of Sterling's Aircel and Aircel Cellular by Aircel Digilink India, a part of the Hutch group.

"Sterling and Hutch have, by mutual consent, terminated the agreement," a statement issued by Dishnet Wireless, owned by the Sterling group, said today.

The companies had entered into a "preliminary binding agreement" for the acquisition in June 2004.

"The exclusivity period under the agreement had ended on November 1, 2004. Subsequently, Sterling and Hutch did not terminate the agreement upon expiry of the exclusivity period since the DoT approval for the acquisition was awaited," it said.

The approval by DoT has still not come through, and the "parties have now terminated the agreement amicably by mutual consent," it said.

The decision to terminate the deal with Hutch comes after the Russian conglomerate AFK Sistema signing a non-binding deal to buy 49% of Aircel Televentures for $450 million. Aircel Televentures is the holding company of Aircel and Aircel Cellular.