Reliance Communications Ltd. today said it has filed an application with the National Company Law Tribunal for withdrawal of the scheme of demerger of its tower business.
The scheme is being withdrawn as RCom's tower deal with Brookfield is currently being reworked following termination of wireless merger talks with Aircel, a company official explained.
“The RITL tower demerger scheme shall, in due course, be taken up for application with the required changes,” the company said in a statement. Reliance Infratel Ltd. is a subsidiary of Reliance Communications and holds the company's tower assets, numbering 43,000 towers.
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The Aircel tenancies would have been a sweetener for Brookfield in the tower deal, but the recent collapse of merger talks between RCom and Aircel has prompted a renegotiation on contours of the deal between the Anil Ambani company and the Canadian firm. The renegotiated deal will be filled afresh with the NCLT in a new demerger petition, the official quoted above said.
The original deal envisaged Brookfield picking up a 51 percent stake in RCom's tower business, and carried a deal value of Rs 11,000 crore. The valuation was, however, based on the combined Aircel-RCom entity offering tenancies post-merger to the tower company, analysts had said.
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“As announced in the media release by the company on October 1, 2017 and for reasons already stated, the merger agreement for the combination of RCom's wireless business with Aircel has been allowed to lapse with mutual consent," the company statement said. Accordingly, an application for withdrawal of the said merger scheme has been filed with NCLT on October 3, 2017, it added.
Reliance Communications, which is reeling under a debt of about Rs 47,000 crore, had cited “legal and regulatory” delays for termination of merger talks with Aircel.
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