RCom, Aircel extend merger exclusivity talks

Reliance Communications (RCom) has extended the exclusivity period for merger talks with Aircel by another 60 days, with the negotiations now slated to end on 22 May.

RCom said in a statement On Wednesday that the talks had made ''good progress so far."

RCom has been in talks with Maxis Communications Berhad (MCB) (See: Reliance Communications in talks with Maxis to acquire Aircel).and Sindya Securities and Investments Private Limited, the shareholders of Aircel to combine their businesses.

In December RCom initiated talks for a three-way merger with Aircel and MTS, a move that would help the combined entity emerge as the second-largest operator in the country in terms of subscribers.

On 22 December RCom had entered into a 90-day exclusive discussions with Aircel shareholders.

''This is to mutually derive the expected substantial benefits of in-country consolidation, including operating expenses and capital expenses and synergies and revenue enhancement,'' RCom had then said.

RCom, controlled by billionaire Anil Ambani, said that the discussions are non-binding in nature.

In an attempt to trim debt, on 4 December RCom  had signed a non-binding agreement with private equity firms Tillman Global Holdings and TPG Asia to sell off its tower assets. While the financials of the deal were not disclosed, media reports pegged it at Rs 30,000 crore.

Under the term sheet, the specified assets are intended to be transferred from Reliance Infratel Ltd (RITL) on a going concern basis into a separate Special Purpose Vehicle (SPV). The SPV will be wholly-owned by Tillman and TPG, RCom said in a statement.

RCom, which had a debt of about Rs40,000 crore, will continue as an anchor tenant on the tower assets under a long-term agreement, it said.