RCom, Aircel promoters ink 50:50 merger deal

Anil Ambani led Reliance Communications (RCom) and promoters of Aircel, Maxis Communications Berhad (MCB), have inked a definitive deal for the merger of their Indian wireless businesses. The merger will be the largest-ever consolidation in the Indian telecom sector.

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The combined entity will create a strong operator clearly ranked amongst India’s top 4 telcos by customer base and revenues, also ranking amongst the top 3 operators by revenues in 12 important circles, RCom said.

The combined entity will enjoy substantial benefits of scale driving significant revenue growth, and capex and opex synergies with an NPV of Rs. 20,000 crore ($3 billion).

RCom and MCB will each hold a 50% stake in the merged entity, with equal representation on the Board of Directors and all Committees. The Company will be managed by an independent professional team under the supervision of the Board.

The combined company will be one of India’s largest private sector companies, with an asset base of over Rs. 65,000 crore ($9.7 billion) and net worth of Rs. 35,000 crore ($5.2 billion).

The merged entity will have the second-largest spectrum holding amongst all operators, aggregating 448 MHz across the 850, 900, 1800 and 2100 MHz bands, and will enjoy enhanced business continuity through extended validity of spectrum holdings till 2033-35.

RCom’s overall debt will reduce by Rs 20,000 crore ($3 billion) or over 40% of its total debt, and Aircel’s debt will reduce by Rs. 4,000 crore (USD 600 million), upon completion of the transaction in 2017, subject to applicable approvals.