March 29, 2024 01:57 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
PM Modi has mastered art of manipulating democracy, hurting Constitution: Mallikarjun Kharge | Mafia-turned-politician Mukhtar Ansari dies of cardiac arrest at 63 | NIA arrests key conspirator in Bengaluru cafe blast case | Actor Govinda returns to politics after 14 years of 'vanvas', joins Eknath Shinde camp | 'To browbeat and bully others is vintage Congress culture': PM posts after 600 lawyers write to CJI
Reliance Communications, Aircel announce merger

Reliance Communications, Aircel announce merger

India Blooms News Service | | 14 Sep 2016, 07:48 pm
Mumbai, Sept 14 (IBNS): In a major development. telecom major Reliance Communications and Aircel announced the merger of their wireless operations on Wednesday.

The announcement was made at a time when the Reliance Jio was launched.

It is controlled by his elder brother Mukesh Ambani. 

The RCOM-Aircel combination 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.

MergedCo 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 2033-35.

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. We expect this combination to create substantial long term value for shareholders of both, RCOM and MCB, given the benefits of the wide-ranging spectrum portfolio and significant revenue and cost synergies."

MCB commented, “This deal further reinforces MCB’s commitment to India. Since acquiring Aircel in 2006, MCB has invested in excess of INR 35,000 crore (USD 5.2 billion) into Aircel, making this one of the largest foreign investments into India, not only in the telecom industry but across all sectors. 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.”

MergedCo will be one of India’s largest private sector companies, with an asset base of over Rs. 65,000 crore (USD 9.7 billion) and net worth of Rs. 35,000 crore (USD 5.2 billion).

The combined entity will enjoy substantial benefits of scale driving significant revenue growth, and capex and opex synergies with an NPV of ~ Rs. 20,000 crore (USD 3 billion).

RCOM and MCB will each hold a 50% stake in the merged entity (“MergedCo”), with equal representation on the Board of Directors and all Committees.

The Company will be managed by an independent professional team under the supervision of the Board.

RCOM’s overall debt will reduce by Rs 20,000 crore (USD 3 billion) or over 40% of its total debt, and Aircel’s debt will reduce by Rs. 4,000 crore (USD 600 million), upon completion of the transaction in 2017. 

Image: Wikimedia Commons
 

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.