Fashion
India’s Reliance Communications (RCom) has called off a planned merger of its wireless business with rival Aircel as a result of regulatory uncertainty and opposition from some creditors.
RCom had been planning to merge its wireless business with Aircel to create a 50:50 joint venture with Aircel parent company Maxis, in a deal aimed at reducing its debt burden by around $3 billion.
But the company announced on Sunday that its merger agreement with Aircel has now “lapsed by mutual consent” due to “legal uncertainties” and “interventions by vested interests” – referring to creditors to the company.
RCom will now have to pursue alternative methods of reducing its substantial debt burden of around 450 billion rupees ($6.8 billion).
LiveMint reports that the operator now plans a fire sale of assets ranging from spectrum to real estate as part of a plan to reduce its debt by around 250 billion rupees. This will partly involve adopting a 4G focus to allow it to monitize its existing 2G and 3G spectrum.
RCom is also planning to sell its tower business and had been seeking to fetch around 110 billion rupees from the sale, but this will need to be revised now that Aircel’s tenancies will no longer be included in the deal.
