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New Delhi, Oct 16 : The government on Thursday gave the green signal to Idea Cellular’s subsidiary Aditya Birla Telecom Ltd (ABTL) for foreign direct investment (FDI) to the tune of Rs 2,704 crore. The FDI comes from a Mauritius-based entity P5 Asia Holding Investments (Mauritius) Ltd enabling it to hold 20% stake in ABTL.
With this deal, the total FDI in the GSM service provider goes-up to 74%, the maximum limit of FDI allowed in the telecom sector.
The funds will be used for network rollout and ongoing operations of ABTL in the Bihar circle.
ABTL owns the telecom UAS licenses for the Bihar service area, which covers the states of Bihar and Jharkhand. The area has the second highest population among all service areas of India, but with the lowest mobile penetration. The Cabinet Committee on Economic Affairs has given approval to Aditya Birla Telecom to sell up to 25,00,000 compulsorily convertible preference shares to P5 Asia Holding Investments (Mauritius) Ltd, which is a member of the Providence Equity group, subject to certain conditions. Currently, Idea Cellular operates in 11 circles in India, in June the company had acquired B K Modi’s 40.8 % stake in Spice Communications for an all-cash amount of Rs 2,700 crore, which included non-compete fees. Under the deal, Idea Cellular bought Spice Group’s shares at Rs 77.30 per share, making the mandatory open offer to Spice shareholders at the same rate. Together Idea and Spice have a subscriber base of around 32 million.
Meanwhile, the Union Cabinet also gave its approval for inclusion of maternity benefit in the Rashtriya Swasthya Bima Yojana, on the condition that the premium is within the existing limit of Rs 750 for every beneficiary. RSBY was launched by the government this year and provides insurance cover to below poverty line families in the unorganises sector.
Construction of a greenfield airport in Pakyong, Sikkim was also given the go-ahead by the CCEA on Thursday. The airport, 35 km away from Gangtok would have a have a 1,700 metre long runway with two parking bays for 72ATR type of aircraft.
The government also approved the ministry of tourism’s proposal to set up 19 new hotel management institutes, besides introduction of hospitality education through ITIs and government colleges to meet the growing demand for trained manpower in hospitality and tourism sector.
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