RCom, Aircel merge, create Rs 65K-cr asset base entity

Maxis and RCom – which is unrelated to Reliance Jio, launched last week by rival operator Reliance Industries – will each own 50% of the business.

Reliance Communications, which on Wednesday announced the merger of its wireless business with Aircel, is looking to raise $1 billion (approximately Rs 6,686.5 crore) in equity to expand the venture and make possible payments to the government for mobile spectrum use, Reuters reported on Thursday.

Towards consideration of the transfer and vesting of the Wireless Business Undertaking of Rcom and RTL, including agreed capex as now proposed, AL will issue and allot to the Company, 15,950,000,000 fully paid up equity shares of AL aggregating to 50% of the fully paid up equity share capital of AL on fully diluted basis.

The two companies will hold fifty percent of the combined unit each, and claim equal representation on the board of members. The move which is primarily aimed at easing the tightening debt situation that the two companies are now caught up in will make the RCom-Aircel unit to be a telecom operator with one of the largest in terms of customer base and revenues generated.

RCom is India’s 4th-biggest telecom operator with nearly 110 million customers, while Aircel ranks fifth with 84 million subscribers. Aircel, the fifth biggest in the market, had an 8.5% share, with 84 million customers. Sistema, which RCom earlier merged with, had 0.7 per cent share.

“RCom will continue to own and operate its high growth businesses in the domestic and global enterprise space, Data Centres, optic fibre and related telecom infrastructure, besides owning valuable real estate”, the statement said.

The merged entity, said the statement, will be one of India’s largest private sector companies, with an asset base of over Rs 65,000-crore ($9.7 billion) and net worth of Rs 35,000-crore ($5.2 billion).