Reliance Communications and Aircel announced the merger of their wireless operations to create a combined entity with assets worth Rs 65,000 crore.
RCom and Maxis Communications Berhad (MCB) hold 50 per cent each in the merged entity with equal representation on the board and committees.
The transaction will reduce RCom’s debt by Rs 20,000 crore (USD 3 billion), while Aircel’s debt would go down by Rs 4,000 crore (USD 600 million) on closing in 2017.
The merger will create India’s fourth largest telecom operator by customer base and revenues.
The merged entity will have the second-largest spectrum holding among all operators, aggregating 448 MHz across 850, 900, 1800 and 2100 MHz bands.
The entity will have assets of Rs 65,000 crore (USD 9.7 billion) and net worth of Rs 35,000 crore (USD 5.2 billion).
Since acquiring Aircel in 2006, MCB has invested in excess of Rs 35,000 crore (USD 5.2 billion) into Aircel, making this one of the largest foreign investments into India, not only in the telecom industry but across all sectors.
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 real estate.
Merger will create a subscriber base of 190 million with Bharti Airtel having a subscriber base of 251 million, followed by Vodafone with 198 million and Idea Cellular with subscriber base of 175 million.
Reliance Communication has spent Rs 5,384 crore in the 850 MHZ space.