RCom, Aircel seek shareholders’ approval as merger hits last lap

The mega merger between Reliance Communications (RCom) and Aircel to create the country’s third-largest operator is entering the final phase, with both companies seeking shareholders' approval in the coming days.

Aircel will hold its shareholders’ meeting on April 22, while that of RCom will be on April 24. The meetings have been convened following a direction by the National Company Law Tribunal (NCLT), according to the notices posted on the companies’ websites.

Following the shareholder meetings, NCLT will hear the merger application filed by the companies on April 24 itself. Shareholder and NCLT approvals are the statutory requirements for the merger.

In March, the companies received Competition Commission of India’s approvals for the merger, prior to which approvals the companies had got permission from capital markets regulator SEBI, and the BSE and NSE.

The merger was announced in September 2016, under which RCom and Aircel’s Malaysia-based promoters Maxis Communications Bhd will hold 50 per cent each in a newly-created venture, with equal representation on the board.

Helping pare debt The merger would help both players pare debt by ₹14,000 crore each, which will be transferred to the new entity. At present, RCom’s debt stands at ₹42,000 crore, while that of Aircel is at about ₹18,500 crore.

This merger, which is to stay relevant in a highly competitive telecom market dominated by bigger players such as Reliance Jio and Airtel, will create an entity with more than 190 million subscribers.

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