The merged company will be one of India’s largest private sector companies, with an asset base of over Rs 65,000 crore and net worth of Rs 35,000 crore (USD 5.2 billion).
September 15, 2016
In the biggest consolidation deal in the telecom sector, Reliance Communications Ltd of the Reliance Anil Dhirubhai Ambani Group has agreed to merge its mobile phone services business with smaller rival Aircel. The RCom-Aircel combination will create a telecom operator ranked fourth by customer base and revenues and number three operator by revenues in 12 important circles.
RCom and Maxis Communications Berhad (MCB) of Malaysia, which owns Aircel, will hold 50 per cent each in the merged entity with equal representation on the board and committees. The merged company will be one of India’s largest private sector companies, with an asset base of over Rs 65,000 crore and net worth of Rs 35,000 crore (USD 5.2 billion).
The entity will enjoy substantial benefits of scale driving significant revenue growth, and capex and opex synergies with a net present value (NPV) of Rs 20,000 crore (USD 3 billion). The company will be managed by an independent professional team under the supervision of the board, RCom and MCB said.
After completion of the merger in 2017, RCom’s overall debt will reduce by Rs 20,000 crore or over 40 per cent of its debt, and Aircel’s debt will reduce by Rs 4,000 crore. However, RCom will continue to own and operate its high growth businesses in the domestic and global space, data centres, optic fibre and related telecom infrastructure, besides owning valuable real estate.
