Reliance Communications Ltd. on Wednesday received an approval from the Securities Exchange Board of India (SEBI) to spin off and merge its wireless business with Aircel Ltd.
The Anil Ambani-promoted company has filed an application with the National Company Law Tribunal (NCLT) in Mumbai for its approval to the proposed merger, Reliance Communications said in a statement.
The approval takes it one step closer to the deal which will allow the company to streamline its divisions and reduce debt, with Rs 14,000 crore being transferred to the new entity, and another Rs 6,000 crore will be used to write off more debt.
Announced in September 2016, the new venture – including Aircel subsidiary Dishnet Wireless Ltd. – will hold a combined debt of Rs 28,000 crore. Once the deal is through, Reliance and Aircel will hold 50 percent each in the new entity.
Shares of Reliance Communications rose 2.9 percent to Rs 37.3 after the announcement.
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