Reliance Communications (RCom) has extended the exclusivity period for the merger talks with the promoters of Aircel by another 60 days. The talks will now end on May 22.
RCom was in talks with Maxis Communications Berhad (MCB) and Sindya Securities and Investments Private Limited, the shareholders of Aircel to combine their businesses.
In a statement, RCom said that the talks had made “good progress so far".
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.
While the discussion with MTS has been on since November, RCom in December said it has entered into a 90-day exclusive agreement with the promoters of Aircel for a possible merger.
Simultaneously, it is in talks with AFK Sistema, the Russian promoters of MTS. The contours of the merger, in terms of shareholding or financial transactions, were not known.
The agreement with Aircel does not include RCom’s towers, optical fibre infrastructure and under-sea cable businesses.
Separately, in a bid to pare debt, RCom was in talks to sell its tower assets to private equity firms TPG and Tillman Global. Separately, the two PE firms are also evaluating RCom’s nationwide inter- and intra-city optic fibre assets.
Together the transactions are expected to fetch about Rs 30,000 crore, all of which will be used to reduce RCom’s debt, currently at nearly Rs 40,000 crore. Further, the financing cost of the debt is also expected to come down to about Rs 600 crore from the present Rs 3,500 crore. The tower assets will be spun out of the company into a Special Purpose Vehicle (SPV). The SPV will be completely owned by Tillman and TPG.
Shares in RCom ended flat at Rs 51.95 on the BSE, which closed flat on Wednesday.