Reliance Communications (Rcom) shareholders have approved the merger of its wireless business with Aircel to create India's fourth largest telecommunications company.
“The shareholders of Reliance Communications at their meeting convened pursuant to the order of the National Company Law Tribunal (NCLT), have today approved with 99.99 per cent majority for the Scheme of Arrangement for demerger of the wireless division of the company and Reliance Telecom Limited (RTL), a wholly-owned subsidiary of the company, into Aircel Limited and Dishnet Wireless Limited (the Scheme),” said a company statement adding that the scheme was also approved by shareholders of RTL at their meeting held on April 24 pursuant to the order of the NCLT.
Shareholders of Aircel had already approved the merger at their meeting held on April 22, 2017, convened under the order of the NCLT.
The company has already received approval from the Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited and Competition Commission of India for the proposed Scheme of Arrangement.
The RCOM-Aircel merger 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.
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 2033-36.
The merged entity will be one of India’s largest private sector companies, with an asset base of over Rs. 65,000 crore ($10 billion) and net worth of Rs. 35,000 crore (USD 5.38 billion).
RCOM’s overall debt including the deferred spectrum payment liability will be reduced by Rs 20,000 crore ($ 3.07 billion) and Aircel’s debt will reduce by Rs. 4,000 crore ($615 million), upon completion of the transaction.
A petition is being filed with the NCLT, Mumbai Bench, for approval of the said Scheme. The proposed transaction is subject to other necessary approvals. Post closing, the company and the present shareholders of Aircel Limited will hold 50% stake each in the merged entity.
Rcom shares closed up 1.18% at Rs 34.3 in a firm Mumbai market on Monday.
