The Mumbai-based telecom company, Reliance Communications, which is currently under a debt of Rs 46,000 crore, The telecom company called off merger talks with Aircel this Sunday, citing “legal and regulatory” delays and outlined an alternative plan for reducing the debts by selling real estate business. Reliance Communications also stated a high level of competition as one of its reasons for termination of the merger talks.

Anil Ambani’s Reliance Communications stated that “Merger of the mobile business of RCom and Aircel lapses with mutual consent and there is no conflict between them” Both the companies had also signed binding agreements in September 2016 for the merger of the mobile business.”

The Telecom Company further mentioned that “Legal and regulatory uncertainties, and various interventions by vested interests, have caused inordinate delays in receipt of relevant approvals for the proposed transaction. The unprecedented competitive intensity in the Indian telecom sector together with fresh policy directives, adversely impacting bank financing for this sector, have also seriously affected industry dynamics. As a result of the various factors aforesaid, the merger agreement has lapsed. These B2B businesses generate equal revenues from domestic and overseas operations. As part of the ongoing transformation and in order to enhance value for all stakeholders, the RCom board reaffirmed the focus on these stable, capital-light B2B businesses which have sustained and predictable revenues and profits, with immense growth potential”. They added that “Reliance Communications already has the unique advantage of capital light access to India’s most world-class nationwide 4G mobile network through spectrum sharing and ICR (intra-circle roaming) Agreements with Reliance Jio”

Reliance Communications is now eyeing on to monetize prime real estate in Mumbai and Delhi as well as telecom tower and optic fiber assets by the end of December. The company has also mentioned that the combination of the mobile business of Sistema Shyam Teleservices Ltd (SSTL) into Reliance Communications will be completed by the end of this month.

 

 

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Posted by TECHITIMES

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