Reliance Communications to sign definitive merger deal with Aircel in first week of September: Report

By August 27th, 2016 AT 7:52 PM

The Maxis owned fifth largest telecom operator, Aircel which was in exclusive merger talks with Anil Ambani led Reliance Communications is expected to sign the merger deal by September first week. According to an NDTV report, term sheet between the companies have been finalised.

“Definitive agreement for merger between the two companies is expected to be signed in a week or 10 days,” an industry source close to the development revealed to the publication.

Aircel and Reliance which were in exclusive merger talks from last December to combine their wireless units to make the third largest telecom operator by subscriber figures, are believed to have 50-50 percent share in the new entity. In last couple of months both the companies have also worked to cut down their debt before the merger deal. Aircel sold their 4G spectrum in 8 circles to Bharti Airtel and RCom is in talks with some global investment company to hive off their tower unit Reliance Infratel.

However, once the deal sign the definitive agreement, it will take 5 -6 months to get regulatory approvals. So we can expect the deal to close by February end. The new combined entity which is in the works, will hold spectrum across 850 Mhz, 900 Mhz, 1800 Mhz & 2100 Mhz bands and will offer Pan India 2G/4G services and 3G services in 18 out of the 22 total circles, trailing Airtel which has 3G Pan India footprint except for Kerala.

On the other hand, RCom and Sistema (MTS) are in the process of merger. Sistema will hold 10% stake in the new entity that will be formed post its merger with RCom, but it will have no board representation. The merged entity will be re-branded and remain unlisted initially. Though the merger has currently hit a roadblock due to the fee demanded by DOT for making Systema’s 850 MHz spectrum contiguous and the fate of the matter depends on the Supreme court judgement due on 19th October.

The merged entity is expected to have Rs 25,000 crore business from the first day of its operation and is estimated to have EBIDTA (cash flow) Rs 7,000 crore and finance cost about Rs 3,000 crore. An SBI-led consortium will extend the loan of Rs 7,000 crore to the entity for fresh capital expenditure and finance the deal.

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Sanjit Roy, Thakurnagar, wbSudhakargeekankurRanga Recent comment authors
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Ranga
Ranga

RComAircel after merger should bring RCDMA tariff to RGsm

Rhishav | Kolkata | Moto X Play
Rhishav | Kolkata | Moto X Play

Hearing the same thing since the first half of this year. Last heard it in June-July.

Sanjit Roy, Thakurnagar, wb
Sanjit Roy, Thakurnagar, wb

Yeah it’s becoming a boring topic, both Rcom&Aircel is driven by some lazy professionals, once a TM said to me that Rcom’s one year =24 months. Then I thought he just joking, now we are witnessing it.

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