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INDIA BUSINESS WORLD - 1st FEBRUARY - TO - 15th FEBRUARY - 2009
DUBAI-BASED MOBILE RETAIL CHAIN CELLUCOM SELLS INDIA OPERATIONS TO SPICE
BK MODI-promoted Spice Group has bought a 100% stake in the Indian arm of Dubai-based mobile retail chain Cellucom. According to the share-swap deal, Cellucom will take 26% stake in Spice Group’s mobile retail venture Hotspot while Spice Corp will buy 100% shares in Cellucom.
"It's a cashless deal, in which we will swap shares. We are buying 100% stake in Cellucom. The CEO and CFO of Hotspot will takeover as CEO and CFO of the new entity. Spice Corp will invest Rs 100 crore in the retail chain this year," Spice Group chairman BK Modi said. The new entity is expected to gross about Rs 900-1000 crore in revenue by fiscal year 2009.
Cellucom has about 120 mobile and IT product retail stores in the country. Hotpsot has about 500 mobile retail stores, the second-largest after Essar promoted The Mobile Store with 1,400 stores.
Cellucom stores may be renamed as Hotspot Cellucom for the time being. Spice Group is expected to announce a new brand for the merged entity, which has over 2,200 employees.
Commenting on the buyout, Mr Modi said that it is a part of Spice Corp’s global acquisition strategy. "Last year, we saw lot of M&A activity in the telecom sector in India. With this acquisition, we are the first company to start a buyout spree in the retail space, which has been struggling under pressure for margins for quite sometime now," Mr Modi added.
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