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Reliance Communications Ltd. (RCom) terminated their mobile business merger with Aircel on Sunday.
“Merger of mobile business of RCom and Aircel lapses with mutual consent,” Reliance Communications said in a release.
RCom and Aircel Limited had signed binding agreements in September 2016 for the merger of RCom’s mobile businesses with Aircel.
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Legal and regulatory uncertainties, and various interventions by vested interests, have caused inordinate delays in receipt of relevant approvals for the proposed transaction, he Anil Ambani-led firm said.
According to media reports, the merger with Aircel was part of RCom’s strategy to reduce debt. The lenders had agreed to give time for the companies to complete the deal by December.
“Unprecedented competitive intensity in the Indian telecom sector, together with fresh policy directives adversely impacting bank financing for this sector, have also seriously affected industry dynamics. As a result of the various factors aforesaid, the merger agreement has lapsed. The Board approved the same,” it added.
The board of directors of the company at a meeting, on Sunday, reviewed the transformation programme and considered alternate plan to reduce debt.
The company said it will evaluate alternative plan for its mobile business by optimising spectrum portfolio and focus on 4G technology as part of its ongoing strategic transformation.
RCom has been given time till December 2017 to service its debt obligations by its lenders.
(With agency inputs)
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