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