<article>Anil Ambani-led <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=reliance">Reliance </a>Communications Ltd (R-Com) on Thursday said it is expecting to sign a binding documentation for merging <a href="http://www.dealstreetasia.com/?s=aircel">Aircel </a>Ltd with itself very shortly.</article>

Anil Ambani-led <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=reliance">Reliance </a>Communications Ltd (R-Com) on Thursday said it is expecting to sign a binding documentation for merging <a href="http://www.dealstreetasia.com/?s=aircel">Aircel </a>Ltd with itself very shortly.
In December, R-Com entered into exclusive talks with Aircel for a potential merger, a month after it announced that it would buy the local unit of Russia’s<a style="color: #000080;" href="http://www.dealstreetasia.com/?s=sistema"> Sistema JSFC</a>.
On 8 June, Mint had reported that R-Com and Aircel are likely to complete their merger by the end of June, citing a top Reliance Group executive, who did not wish to be identified.
R-Com, in its filing to stock exchanges, said the firm and Maxis Communications Bhd (MCB) and Sindya Securities and Investments Pvt. Ltd (Sindya), Aircel’s shareholders, expect to sign binding definitive documentation and announce the proposed transaction for the combination of the Indian wireless business of R-Com and Aircel very shortly.
“Any transaction will be subject to regulatory, shareholders’ and other third-party approvals. Hence, there is no certainty that any transaction will result,” R-Com said. The merged entity, which will be India’s third largest telecom firm by subscribers, is expected to save about Rs.2,500 crore a year through synergies between the two operations.
The combined entity is expected to have Ebitda (earnings before interest, tax, depreciation and amortization) ofRs.5,000-6,000 crore in the next financial year with a revenue of Rs.25,000 crore. A strategic investor is expected to investRs.3,000 crore in the entity.
As part of the deal, R-Com will spin off its mobile business and this will merge with the mobile business of the Maxis-owned Aircel; Both R-Com and Aircel will transfer Rs.14,000 crore each of their debt to the new entity.
R-Com has a total debt of around Rs.41,000 crore. The new telecom firm, a equal joint venture of R-Com and Aircel, will be unlisted and operate under a new brand name.
“Still, there is no clarity on the deal. We understand that the time period of merger talks has been extended by two more weeks. A deal is expected in the next 10 days,” said a senior analyst with a domestic brokerage tracking R-Com said, requesting anonymity. A person close to the development said the merged entity is expected to have a revenue market share of around 12% and expected to hold 19.3% spectrum in India.
“R-Com shareholders will receive free listed shares in the new combined wireless entity,” he said adding that there could be a potential employee rationalization in the context of merger. He did not disclose the details.
Also read:
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/reliance-communications-aircel-a-merger-of-equals-44449/">India: Reliance Communications-Aircel – a merger of equals?</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/india-airtel-to-buy-4g-spectrum-from-aircel-36852/">India: Airtel to buy 4G spectrum from Aircel in 8 telecom Zones</a>
This story was first published on <a style="color: #000080;" href="http://www.livemint.com/Industry/KdlPDFnnDtlEQlEMgmmoMN/RCom-to-sign-binding-pacts-for-merging-Aircel-with-itself-s.html">Livemint</a>

Anil Ambani-led Reliance Communications (R-Com) said it is expecting to sign a binding documentation for merging Aircel with itself very shortly.

India: R-Com to sign binding pacts with Aircel for merger soon

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India: R-Com to sign binding pacts with Aircel for merger soon

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