'Ambani may head RCom-MTN joint venture'

Written by Agencies | New Delhi, May 30: | Updated: May 30 2008, 23:51pm hrs
Anil Ambani, the head of Reliance Communications that is in merger talks with South African telecom major MTN, could end up with a 35 per cent stake and also become the chairman of the merged entity, a UK media report said.

A possible merger of Reliance Communications and MTN "could see Anil Ambani become the enlarged group's chairman and biggest shareholder with a stake of almost 35 per cent," the Financial Times said in a report.

According to the newspaper, Ambani is pushing for a controlling position in the merged entity, even as the deal would be structured as a reverse takeover by MTN.

"The merger talks are focused on the possibility of Mr Ambani swapping most or all of his 66 per cent stake in Reliance for shares in MTN. He could end up with a 34.9 per cent stake in MTN," the Financial Times said in an article published in its online edition.

Quoting people close to the situation, the report said MTN's chief executive Phuthuma Nhleko could hold the same position following a merger with Reliance, with Ambani becoming chairman.

"Alternatively, Mr Ambani could be co-chairman of the enlarged group alongside Cyril Ramaphosa, MTN's chairman," it added.

The report also said the stock swap would incorporate a premium that values MTN's equity at more than R175 (23 dollars) a share. Earlier this week, Reliance Communications had said that it is in exclusive talks with MTN for a possible merger.