The National Company Law Tribunal (NCLT) today admitted a petition filed by Reliance Communications for its merger with smaller rival Aircel.
The National Company Law Tribunal (NCLT) today admitted a petition filed by Reliance Communications for its merger with smaller rival Aircel. The NCLT bench of judges BSV Prakash Kumar and V Nallasenapathy also admitted RCom’s petition for a 51 per cent sale in its telecom tower business to Canadian fund Brookfield Infrastructure Group. It posted both the petitions for final hearing on September 13. The Department of Telecom, represented by senior council Beni Chatterji, had earlier told the tribunal that it would be appropriate for Aircel and RCom to take permission from the Supreme Court since the issue of 2G spectrum of Aircel is pending there. RCom, which is apparently sitting on a huge debt pile, told the tribunal that it is running against time to complete the merger with Aircel and stake sale in the tower business. Both the deal is part of the Anil Ambani group company’s bid to trim its debt.
Post-merger, debt of RCom will come down to around Rs 20,000 crore from over Rs 41,362 crore as of March 2016, while that of Aircel to around Rs 4,000 crore, the companies had claimed while announcing the merger. The city-headquartered RCom had signed an agreement to merge its wireless business with the Malaysian Maxis Communications-owned Aircel and Dishnet Wireless, last September in an all stock deal.
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Merger will combine Rcom’s struggling wireless business and Aircel’s operations, including the entire spectrum held by the two companies. The merger would create asset base of over Rs 65,000 crore and net-worth of Rs 35,000 crore. Both RCom Maxis will hold 50 per cent each in the merged entity. The companies have already received approvals from the markets watchdog Sebi, and the bourses for the proposed merger as also shareholders’ approval.