AFK Sistema to acquire Aircel

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AFK Sistema to acquire Aircel

February 15, 2005

AFK Sistema, a Russian company, has signed a non-binding deal to acquire a 49 per cent stake in the C. Sivasankaran-promoted Aircel, a cellular service provider offering services in Chennai and Tamil Nadu circles, for $450 million (about Rs 19.6 billion). The Russian company has the option to increase its stake to 51 per cent. The deal is subject to regulatory approvals. In June 2004, Sivasankaran had signed an agreement to sell Aircel to Hutchison-Essar in a deal estimated to be valued at Rs 16 billion. Regulatory approval was expected within 45 days. However, that has not happened yet and though both companies have not officially called off the deal, the time period of the exclusivity agreement with Hutchison has expired.