Hutch, Sterling deal off on Aircel

Sterling Infotech Group and Hutchison Essar Group have terminated the agreement, which contemplated 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 by Dishnet Wireless Ltd., owned by the Sterling Group, said in Chennai.

Both 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 the department of telecommunications 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 Russian conglomerate AFK Sistema signed a non-binding deal to buy 49 per cent of Aircel Televentures for $450 million.

Aircel Televentures is the holding company of Aircel and Aircel Cellular. A spokesman for Sterling said that the company was also in talks with other international telecom firms to sell its stake in Aircel Televentures.