RCom’s merger with Aircel will need SC clearance: DoT
MUMBAI: The Department of Telecommunications (DoT) has said that Reliance Communications Ltd’ s( R Com) merger with Air c el Ltd would need a no-objection or clearance from the Supreme Court before it approves the deal.
Separately, some of the creditors who had earlier objected to the deal as it was not presented to them before being filed with National Company Law Tribunal (NC LT) have given a conditional consent to the deal.
In an affidavit filed at the NCLT, which was hearing the merger petition of the two telecom companies on Wednesday, DoT said the apex court had res trained Air ce lLtdf rom selling and trading 2 G spectrum allotted to it in 2006 in a January 6 order.
A bench headed by Chief Justice JS Khehar in the order also said that it may cancel Aircel’s use of the 2G licences if Malaysian businessman T Ananda Krishnan of the Maxis Group continued to avoid appearing before Indian courts in a case connected with irregularities in grant of 2G spectrum licences. Maxis Group, owned by Krishnan, has a 74% stake in Aircel.
A special Central Bureau of Investigation court has ordered Krishnan to appear before it, but he hasn’t complied.
“It is humbly submitted that the petitioners maybe directed to take suitable permissions from the Honourable Supreme Court before submission of the proposed scheme of arrangement,” Do T said in the affidavit, a copy of which has been reviewed by Mint.
A spokesperson for RCom declined to comment.
A RCom counsel told NCLT that the company has already submitted the proposed scheme of arrangement to the Supreme Court and the court has so far not raised any objection or issued observations.
The merger with Air ce li sc ruci al for R Com to reduce debt on its books at a time when new entrant Reliance J io is squeezing the profitability of incumbents.
RComplans to sell its tower business to Brookfield Asset Management Inc for ₹11,000 crore. It plans to spin off its wireless unit and merge it with Aircel Ltd, which will result in ₹14,000 crore getting transferred to the merged entity. This will remove ₹25,000 crore of debt from the books of RCom, which has total debt of around ₹45,000 crore.