Anil Ambani led Reliance Communications (RCom) board has approved the company’s merger with Aircel. The merged company will be one of India’s largest private sector companies, with an asset base of over Rs 65,000 crore and net worth of Rs 35,000 crore.
To grow the business further both companies have agreed to bring in $580 million each to create Rs 7,600-crore equity pool. After the merger the entity is likely to have a new brand name. Both companies will have 50:50 ownership of this new entity that will remain unlisted in initial years.
Upon completion of the merger in 2017, Reliance communications overall debt will reduce by Rs 20,000 and Aircel’s debt will reduce by Rs 4,000 crore.
Anil Ambani, Chairman, Reliance Group said, “We are delighted to have taken the lead in consolidation of the Indian telecom sector. We expect this combination to create substantial long term value for shareholders of both, Reliance Communication and MCB (Maxis Communications Berhad- parent company of Aircel)”
It has been said that the merger will create a subscriber base of 190 million. The merged entity will be managed by an independent professional team under the supervision of the Board of Directors of both companies.