India: Reliance and Aircel call off merger

Reliance Communications (RCom) and Aircel have called off talks for a possible merger of their respective mobile service operations.

RCom and Aircel Limited had signed binding agreements in September 2016 for the merger of RCom’s mobile businesses with Aircel. “Legal and regulatory uncertainties, and various interventions by vested interests, have caused inordinate delays in receipt of relevant approvals for the proposed transaction. Unprecedented competitive intensity in the Indian telecom sector, together with fresh policy directives adversely impacting bank financing for this sector, have also seriously affected industry dynamics. As a result of the various factors aforesaid, the merger agreement has lapsed,” RCom said in a statement.

“The Board decided that RCom will evaluate an alternate plan for its mobile business, through optimization of its spectrum portfolio and adoption of a 4G focused mobile strategy,” the company said.

The merger with Aircel was part of RCom’s strategy to reduce debt. The lenders had agreed to give time for the companies to complete the deal by December. “The Company continues to be under a standstill period till December 2018 and expects to complete the SDR process as per applicable guidelines,” RCom said.

RCom said that it will evaluate opportunities for monetisation of its spectrum holding through trading and sharing arrangements.

Full Content: Economic Times

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