Reliance Communications calls off tower biz demerger plans: Srcs

Reliance Communications calls off tower biz demerger plans: Srcs

Cheryl Sanders
October 5, 2017

A day after calling off its merger with Aircel, Reliance Communications on Monday said it was in talks with private equity firm Brookfield to sell 100 per cent stake in the telecom company's tower unit.

In a statement Wednesday, the Anil Ambani-owned telco said it will file a fresh scheme of demerger of the towers of Reliance Infratel before the NCLT "in due course".

Reliance (RCom) this week dropped its plan to merge with rival mobile operator Aircel, and that may mean that its infrastructure business is less attractive to Brookfield Infrastructure Partners, according to commentators in India. Furthermore, as a outcome, the application for the withdrawal of the cheme of the demerger of the tower business under RITL has also been concurrently filed as on 3 October 2017. Brookfield was to pay RCom upfront cash of Rs 11,000 crore for 51 per cent interest whereas RCom will retain 49 per cent stake in the business, which was to be sold later.

Meanwhile, Moody's Investors Service has said RCom's cancellation of the merger agreement of its mobile business with Aircel has no impact on the company's corporate family and senior secured bond ratings, and the ratings outlook remains negative. The valuation is going to get lower as Rcom pulled out of the merger with Aircel.

Reliance Communications, which is reeling under a debt of about Rs 47,000 crore, had cited "legal and regulatory" delays for termination of merger talks with Aircel.

Other reports by iNewsToday