RCom/Aircel merger given nod by India's Law Tribunal
India’s National Company Law Tribunal (NCLT) has approved Reliance Communications’ merger with Aircel, taking the deal a step nearer to completion, according to reports.
According to the Business Standard, NCLT has also approved RCom’s sale of a 51% stake in its tower arm to Brookfield for despite £1.7 billion objections from Bharti Infratel, GTL, and Ericsson.
RCom’s merger proposal with Aircel has already received approvals from Sebi, CCI, BSE and NSE, after it was first announced in August 2016. The combined unit will become the third largest mobile operator in the country.
The deal will facilitate the sale of RCom’s stake in its tower unit to Canadian firm Brookfield, as part of an exercise in reducing the firm’s level of debt. The Economic Times claims the moves could reduce RCom’s debt level by as much as 60%.
RCom is looking to seal the deal by December, according to the reports, when an extension of some of its repayments will run out. The final merger is expected to be passed on September 13.
The merger is one of a number of movements in the Indian market, which has been shaken up by the entrance of Reliance Jio last year. Idea Cellular is merging with Vodafone, whilst Bharti Airtel is buying Telenor's Indian unit.