Reliance Communications in talks with Maxis to acquire Aircel

Reliance Communications (RCom) is in talks with shareholders of telecom operator Aircel for a potential merger of the wireless or mobile businesses of the two companies.

"It has entered into a 90-day exclusivity period with Maxis Communications Berhad (MCB) and Sindya Securities and Investments Private Limited, the shareholders of Aircel Limited, to consider the potential combination of the Indian wireless businesses of RCom and Aircel," Rcom said in a release.

The Anil Ambani-led telecom company is already in the process of buying Indian mobile telephony business of Sistema Shyam Teleservices under MTS brand.

The plan is to merge the operations of mobile business of three companies - RCom, MTS and Aircel -  under a new entity led by RCom.

The merged entity will be created through equity deal where RCom's shareholders are looking for three shares against each held by them.

The current debt of RCom, estimated to be around Rs10,000 crore, will be transferred to this new entity and the company will become free of debt, sources said.

RCom said "it has entered into a 90-day exclusivity period with Maxis Communications Berhad (MCB) and Sindya Securities and Investments Private Limited, the shareholders of Aircel Limited, to consider the potential combination of the Indian wireless businesses of RCom and Aircel."

The merger, according to RCOm, will offer substantial benefits of in-country consolidation, including operating expenditure and capital expenditure synergies and revenue enhancement.

"The discussions are non-binding in nature. Any transaction will be subject to due diligence, definitive documentation and regulatory, shareholders' and other third party approvals. Hence, there is no certainty that any transaction will result," the company said.

The potential combination will exclude RCom's towers and optical fibre infrastructure, for which RCom is proceeding with an asset sale, as announced on 4 December 2015.

RCom had signed a non-binding pact to sell its cellular towers to private equity firm Tillman Global Holdings LLC and TPG Asia Inc in an estimated Rs30,000 crore deal to pare debt.

RCom is already in the process of buying Indian mobile telephony business of Sistema Shyam Teleservices under MTS brand.

A combination of RCom, Aircel and MTS wireless businesses will hold 19.3 per cent 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.