RCom calls off Aircel merger; blames legal uncertainties, policy directives for delay

“Merger agreements with Aircel allowed to lapse by mutual consent,” said the statement released by Anil Ambani’s company Reliance Communications.

Reliance Communications on Sunday called off its merger with Aircel citing delays due to regulatory and legal uncertainties and interventions by various parties. “Merger agreements with Aircel allowed to lapse by mutual consent,” said the statement released by the Anil Ambani company. “Inordinate delays caused by legal and regulatory uncertainties, various interventions by vested interests, policy directives impacting bank financing for telecom and changed industry dynamics,” said the company’s statement.

RCom, had been trying to reduce its heavy debt by 250 billion rupees by merging its wireless business with rival Aircel and by selling a stake in its mobile masts arm to a unit of Canada’s Brookfield Asset Management. RCom’s net debt stood at 443.45 billion rupees ($6.92 billion) at the end of March. The merger with Aircel was expected to bring down the company’s debt by 60%.

Rcom will evaluate alternative plans for its mobile business through optimisation of its spectrum portfolio and 4G focussed strategy, the statement added. The company expects monetisation of tower and fibre assets along with real estate along with optimisation of spectrum assets to generate proceeds of Rs 25,000 crore in debt reduction.