NCLT Likely to Take Call on RCom-Air­cel Merger Plan at Hear­ing on Au­gust 14

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

Mumbai: The Na­tional Com­pany Law Tri­bunal is set to pro­nounce its de­ci­sion on Mon­day on whether or not to con­sider the pro­posal of merger be­tween Re­liance Com­mu­ni­ca­tions’ wire­less busi­ness and Air­cel. Shares of RCom closed 4.9% lower at ₹ 21.20 on the Bom­bay Stock Ex­change Thurs­day, the day when a bench com­pris­ing Jus­tices BSV Prakash Ku­mar and V Nal­lase­na­p­a­thy said they would de­liver the de­ci­sion on Au­gust 14.

The $6-bil­lion merger of debt-rid­den tele­com op­er­a­tors RCom and Air­cel has al­ready re­ceived ap­provals from the Se­cu­ri­ties and Ex­change Board of In­dia, Com­pe­ti­tion Com­mis­sion of In­dia and the Bom­bay Stock Ex­change and the Na­tional Stock Ex­change.

The merger, if it hap­pens, will set the ball rolling for a sale of RCom’s stake in its tower unit to Canada’s Brook­field. To­gether, the deals could re­duce the tele­com firm’s debt of nearly ₹ 45,000 crore by as much as 60%. The Anil Am­bani-owned com­pany’s coun­sel had ear­lier said it was run­ning against time to com­plete the Air­cel deal. RCom, which has de­faulted on some re­pay­ment obli­ga­tions, needs to close the merger as well as the tower sale within the seven-month breather it has from lenders, which ex­pires in De­cem­ber. RCom has said that it wanted to com­plete both deals by Septem­ber.

The com­pany’s board is set to meet on Au­gust 12 to re­view the merger plan with Air­cel and look into the pos­si­bil­ity of con­ver­sion of debt into eq­uity shares. The board will also look into other mea­sures to re­duce debt on Satur­day, when the com­pany is ex­pected to also de­clare its first-quar­ter re­sults.

The merger, if ap­proved, will en­able RCom to sell its tower unit to Canada’s Brook­field and pare debt

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