Reliance Communications (RCom) and Maxis Communications Berhad (MCB), promoters of Aircel, have signed definitive documents for the merger of their Indian wireless businesses.
The merger between RCom and Aircel, a leading pan-India mobile operator, will create an operator, which will be ranked among India’s top four telecom companies by customer base and revenue, and also among the top three operators by revenue in 12 important circles.
The merged 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). RCom and MCB will each hold a 50% stake in the merged entity, with equal representation on the board of directors and all committees, RCom said.
On consummation of the merger, RCom and MCB are committed to an additional equity infusion into the merged company to further strengthen the balance sheet, fund future growth plans and enhance financial flexibility.
RCom’s overall debt will reduce by Rs 20,000 crore ($3 billion) or over 40% and Aircel’s debt will reduce by Rs 4,000 crore ($600 million), upon completion of the transaction in 2017, RCom said.
“Together with our partners, MCB, we are delighted to have taken the lead in consolidation of the telecom sector, first, with RCom’s acquisition of the wireless business of SSTL (Sistema / MTS), and now, with the combination of our business with Aircel in a 50:50 joint venture with MCB,” Reliance group chairman Anil Ambani said.
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