RCom, Aircel will merge to create India's fourth largest telecom company
Anil D. Ambani, Chairman, Reliance Group, said "Together with our partners, MCB, we are delighted to have taken the lead in consolidation of the Indian 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 Ltd. in a 50:50 Joint Venture with MCB.”
RCOM AND MCB TO HOLD 50% EACH IN ‘MERGEDCO’ WITH EQUAL REPRESENTATION ON BOARD AND COMMITTEES
TRANSACTION WILL REDUCE RCOM DEBT BY RS 20,000 CRORE (USD 3 BN) OR OVER 40% OF TOTAL DEBT, AND AIRCEL DEBT BY RS 4,000 CRORE (USD 600 MN) ON CLOSING IN 2017
MCB REAFFIRMS ITS COMMITMENT TO INDIA AFTER HAVING ALREADY INVESTED OVER RS 35,000 CRORE (USD 5.2 BN) IN AIRCEL LTD.
2 ND LARGEST SPECTRUM PORTFOLIO AMONGST ALL OPERATORS IN INDIA ACROSS THE 850, 900, 1800 AND 2100 MHZ BANDS, WITH 2G, 3G & 4G OPERATIONS ACROSS THE COUNTRY
COMBINED ENTITY TO ENJOY ENHANCED BUSINESS CONTINUITY THROUGH EXTENDED VALIDITY OF SPECTRUM TILL 2033-2035
MERGEDCO TO CLEARLY RANK AMONGST TOP 4 OPERATORS IN INDIA ON CUSTOMER BASE AND REVENUES
MERGEDCO TO RANK AMONGST TOP 3 OPERATORS BY REVENUES IN 12 IMPORTANT CIRCLES
NPV OF CAPEX AND OPEX SYNERGIES ESTIMATED AT ~ RS 20,000 CRORE (USD 3 BN)
Anil Ambani-backed Reliance Communication (RComm) and Maxis Communication Berhad's (MCB) Aircel on Wednesday said that the two will merge their mobile business to create India's fourth largest telecom company.
Anil Ambani, Chairman, Reliance ADAG Group, said, "Together with our partners, MCB, we are delighted to have taken the lead in consolidation of the Indian 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 Ltd. in a 50:50 Joint Venture with MCB.”
The merged company will have 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 Maxis will each hold a 50% stake in the merged entity (“MergedCo”), with equal representation on the Board of Directors and all Committees.
Once the transaction completes, it will help reduce RCom's overall debt by Rs 20,000 crore ($3 billion) or over 40% of its total debt, and that of Aircel’s debt by Rs. 4,000 crore ($600 million).
RComm will continue to own and operate its high growth businesses in the domestic and global enterprise space, Data Centers, optic fibre and related telecom infrastructure, besides owning valuable real estate, it said.
The merged telecom entity will hold second-largest spectrum (valid till 2033-35) amongst all operators in India, aggregating 448 MHz across the 850, 900, 1800 and 2100 MHz bands.
MCB said, "The magnitude of this investment, and the further equity commitment in support of this deal, are underpinned by MCB’s belief in the long term growth potential of both India and the Indian telecom sector."
MCB, since it's acquisition of Aircel in 2006, has invested in excess of Rs 35,000 crore (USD 5.2 billion) into Aircel, making it one of the largest foreign investments into India.
Shares of RComm closed up 2.7% on BSE and NSE on Wednesday.
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