RCom shareholders approve merger with Aircel
Anil Ambani-controlled Reliance Communications Ltd (RCom) has received shareholders’ approval to separate its wireless division and unit Reliance Telecom Ltd and merge it with smaller rival Aircel Ltd and Dishnet Wireless Ltd.
Mumbai-based RCom had signed a definitive agreement to merge its wireless business with Aircel in September last year.
As part of the agreement, the merged entity will combine Reliance Communications’ wireless business and Aircel’s operations in India, including the entire spectrum held by the two companies.
RCom has already received approval from the capital markets regulator Securities and Exchange Board of India, BSE Ltd, National Stock Exchange of India Ltd and Competition Commission of India for the proposed merger.
Once the deal is completed, RCom’s overall debt, including the deferred spectrum payment liability, will be reduced by Rs 20,000 crore, or roughly 48% of the Rs41,362.1 crore outstanding as of 31 March, 2016, and Maxis Communications Bhd-owned Aircel’s debt will come down by Rs 4,000 crore.
At the time of signing the agreement, RCom claimed that the merged entity will have the second-largest spectrum portfolio among all telecom operators in the country in bands such as 850MHz, 900MHz, 1800MHz and 2100MHz.
Also, it will enjoy enhanced business continuity through extended validity of spectrum holdings till 2033-36 and will be one of India’s largest private sector companies, with an asset base of over Rs65,000 crore and net worth of Rs35,000 crore.
The merged company’s subscribers will have access to nationwide 4G LTE services in the sub-1GHz band, under Reliance Communications’ existing nationwide spectrum sharing and intra-circle roaming arrangements with Reliance Jio Infocomm Ltd.
A petition is being filed with the National Company Law Tribunal for approval of the merger.
Once the deal is completed, both Reliance Communications and Maxis Communications will hold 50% each in the merged entity and have equal representation on the board and committees.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.