Rcom gets regulatory nod for merger of wireless business with Dishnet, Aircel

Anil Dhirubhai Ambani Group company Reliance Communications (Rcom) today said market regulator Securities Exchange Board of India (Sebi) as well as stock exchanges National Stock Exchange of India Limited (NSE) BSE Limited (BSE) have approved the scheme of arrangement for merger of its wireless division with Dishnet Wireless Limited and Aircel Limited.

RCom has now filed an application with the National Company Law Tribunal (NCLT), Mumbai Bench, for approval of the scheme. The proposed transaction is subject to other important approvals.

Under the merger scheme, RCom and all the current shareholders of Aircel will hold 50 per cent each in Aircel Limited, post-closing of the deal.

The combined company will be one of India's largest private-sector companies, with an asset base of over Rs65,000 crore ($9.7 billion) and net worth of Rs35,000 crore ($5.2 billion).

RCom had, in September last year, inked an agreement with Aircel for merger of its wireless business with Aircel's wireless operations to create a new entity with assets worth Rs65,000 crore.

The merger will create India's fourth largest telco by customers and revenues. The merged entity will have the second-largest spectrum holding among all operators, aggregating 448 MHz across 850, 900, 1800 and 2100 MHz bands.

RCom recently said that its merger with Aircel, and tower deal with Brookfield will be completed by the middle of 2017.

It had also said that its merger with Sistema Shyam Teleservices, which operates under MTS India, will be completed by March end this year.

The stock of Reliance Communications on the NSE, soon after the announcement, jumped by over 3 per cent on an intraday basis.

The stock has given negative returns of 29 per cent in a period of one year, underperforming the BSE Mid-cap and Nifty Service Sector indices over the same time.