Idea completes acquisition of Escotel Mobile

Idea Cellular on Thursday announced that it has completed the acquisition of Escotel Mobile Communications Ltd (EMCL) by acquiring all shares from its promoters, Escorts Telecommunications Ltd and First Pacific.

In order to complete the transaction, Idea has obtained approvals of all its lenders and replaced all the lenders of Escotel by raising Rs 450 crore through a project recourse loan from RABO bank and short-term loans from Bank of India, UTI Bank, HDFC Ltd and non-fund based facilities from Punjab National Bank.

The refinancing of the debt is expected to save Escotel over 300 basis points. Standard Chartered Bank acted as the arranger for the Rs 275 crore acquisition financing facility availed by Idea Cellular for this transaction.

Vikram Mehmi, CEO, Idea Cellular Ltd, said, "Idea's successful track record in M&As has once again been proven with this acquisition being completed within a record time of signing the definitive agreement. Idea will continue to grow organically and inorganically, and is poised to become a long term player in the Indian telecom scenario."

Idea has already put in place a blue print for integration of Escotel, including migration of Escotel with Idea Brand in UP (West), Haryana and Kerala telecom circles.

Prior to this, Idea has already harmonised management structure, designations, compensation structure and all HR policies between the two companies.

With the completion of the acquisition, the new circles of UP (West), Haryana and Kerala become the operating units of Idea Cellular with immediate effect.

Idea also enjoys incumbency advantage in as many as seven circles that entitles it to an additional 2 per cent reduction in license fees for four years from April 1, 2004 which has been granted only to the incumbent first and second operators in non-metro circles.

Idea has leadership position in four out of the seven circles. In Delhi, Idea has captured over half a million customers within 17 months of its launch thus becoming the fastest growing fourth operator in the country.