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RIL-RCom spat takes new turn

RIL-RCom spat takes new turn
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First Published: Thu, Jul 03 2008. 10 57 PM IST
Updated: Thu, Jul 03 2008. 10 57 PM IST
New Delhi: The latest spat in the feud between estranged billionaire businessmen, Mukesh Ambani and younger brother Anil Ambani, took a new turn late on Thursday with Reliance Industries Ltd, or RIL, chaired by the elder brother asking Reliance Communications Ltd, or RCom, “to participate in the process of mutual conciliation” before formal arbitration proceedings are started over the latter’s ongoing merger talks with African phone firm MTN Group Ltd.
The RIL move made in a press statement came even as RCom and MTN are planning to entend the exclusivity nature of their talks that end on 9 July. “RIL has invoked the provisions of dispute resolution contained in the Non Competition Agreement dated January 12, 2006 and has invited RCom to participate in the process of mutual conciliation prior to commencement of formal Arbitration”, the statement said.
In reaction, an RCom spokesman said Thursday’s development was “a sign of RIL’s increasing desperation and frustration,” at the merger talks.
Meanwhile, RCom and MTN are likely to extend their exclusive negotiations by two-three weeks, two people with knowledge of the talks said.
“It is likely the period of discussions will be extended by two-three weeks; the discussions are proceeding smoothly and both sides want some more time,” one person close to the discussions said, asking not to be identified.
Meanwhile, Financial Times reported Wednesday that Reliance Communications, with co-investments from a global private equity player and West Asian sovereign wealth funds, is looking at acquiring a 51% stake in MTN.
“I have no fresh comments to offer. I am not sure whether the talk’s period will be extended at this stage. We will wait for the outcome on July 8,” said Nozipho January-Bardill, MTN Group spokeswoman. A Mumbai-based analyst who has been tracking the deal said the 45-day “exclusivity” deadline is likely to be extended beyond 9 July.
According to this person, Anil Ambani is trying to put the new structure in place to avoid any legal impact on the ‘right of first refusal’ by RIL chairman Mukesh Ambani, who had quoted an early 2006 agreement when the two brothers decided to split. “This way it will be RCom buying MTN and not selling its stake. The deal will also depend on whether it is being done at the Adag (Anil Dhirubhai Ambani Group) level or at the RCom level,” this person added.
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First Published: Thu, Jul 03 2008. 10 57 PM IST