Reliance Communications, Aircel merger talks extended again by 30 days
Reliance Communications (RCom) on Saturday said the company and Aircel has decided to extend by 30 days the discussion period for the possible merger of the two telecom operators.
This is for the second time the companies have extended the discussion period for the merger. The telcos previously on March 22 had extended the merger talks by 60 days.
"Based on the substantial further progress made, RCom, Maxis Communications Berhad (MCB) and Sindya have mutually extended the exclusivity period between RCom and MCB and Sindya Securities and Investments Private Limited (Sindya), the shareholders of Aircel Limited, by 30 days to June 22, 2016," RCom said in a statement.
The discussion has been extended to consider the potential combination of the Indian wireless business of RCom and Aircel and mutually derive the expected substantial benefits of in-country consolidation, including operational and capital expenditure synergies and revenue enhancement, the statement said. Sources said that financial arrangements and due diligence of the deal have been completed.
"RCom is looking for a slight higher share in the new entity and the discussions are going on around actual shareholding," the source said.
The companies on December 22 announced that they have entered 90-day 'exclusivity period' for the deal that will exclude RCom's tower and optical fibre assets for which a separate sale process is ongoing, the company said in a statement.
On March 22, both the companies again extended the discussion period by another 60 days. RCom and Aircel talks, if successful, would lead to a combined entity holding 19.3% of the total spectrum allocated to the industry - the highest in the country by an entity.
The new entity, which is in the works, will hold spectrum across all allocated bands -- 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 MHz -- for 2G, 3G and 4G services.
On the other hand, RCom and Sistema (MTS) are in process of merger. Sistema will hold 10% stake in the new entity that will formed post its merger with RCom.