Reliance Jio impact: Reliance Communications, Aircel merger cleared by Sebi; subscriber base of entity to rise to 177 mn

Capital markets regulator Sebi has approved the merger of Reliance Communications with Maxis-owned Aircel.

Capital markets regulator Securities and Exchange Board of India (Sebi) has approved the merger of Reliance Communications (RCom) with Maxis-owned Aircel. Stock exchanges BSE and NSE too have given their approval to the proposed merger that will create an entity in which both RCom and Aircel’s controlling firm, Maxis Communications Berhad, will hold an equal stake of 50% each. After the approvals, RCom has moved the National Company Law Tribunal (NCLT) to get the tribunal’s clearance on the scheme.

After these clearances, the merger also needs to be approved by fair trade regulator Competition Commission of India (CCI) and the NCLT. While CCI’s approval is expected any time this week or the next, the tribunal is expected to hear the merger issue later this month.

RCom in a statement on Wednesday said that it has received approval of Sebi, BSE and National Stock Exchange of India (NSE) for the proposed scheme of arrangement for demerger of the wireless division of the company into Aircel Ltd and Dishnet Wireless Ltd (the scheme).

It further said that the company has filed an application with the NCLT’s Mumbai bench for approval of the scheme.

In September last year, RCom and Aircel had announced merger talks to create an entity with an asset base of more than Rs 65,000 crore and a net worth of Rs 35,000 crore. Besides, it will help trim RCom’s overall debt by Rs 20,000 crore and that of Aircel by Rs 4,000 crore.

The merged company will also have a total subscriber count of more than 177 million.
With the entry of Reliance Jio Infocomm into the fiercely competitive domestic telecom market, the sector has witnessed an unprecedented churn with RCom announcing mergers with Aircel and MTS, while the country’s second and third largest telecom operators — Vodafone India and Idea Cellular — have announced merger talks.

Also, Norwegian telecom firm Telenor announced its exit from India, selling its business to market leader Bharti Airtel.