The merger of Reliance Communications (RCOM) with Aircel is one step closer, with the shareholders of RCOM giving it their go-ahead with a 99.99 per cent majority.
Reliance Communications released a statement to this effect, stating that the approval paves the way for the demerger of the wireless division of RCOM and Reliance Telecom Limited (RTL) with Aircel Limited.
Aircel shareholders had already given their approval for the deal on April 22, 2017.
With the Indian telecom sector seeing increased competition, a number of companies are exploring the option of mergers. While Vodafone and Idea have agreed on a deal for their merger, Airtel acquired Telenor to boost its performance.
The merged Aircel-RCOM entity will have a spectrum of 448 MHz, making it the second-largest spectrum holder in India. The combined asset base of Rs.65,000 crore would make it one of the largest private sector companies in the country.
RCOM will see its debt reduce by Rs.20,000 crore following the merger, while Aircel will reduce its debt by Rs.4,000 crore. The new entity will have a net worth of Rs.35,000 crore.
The Securities and Exchange Board of India (SEBI), Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and the Competition Commission of India (CCI) have all given their approval for the merger.
While Anil Ambani heads Reliance Communications, Aircel has Maxis Communications as its biggest investor. Both the companies offer 2G, 3G, and 4G data services, in addition to wireline services. RCOM and Aircel had a customer base of 95 million and 88 million respectively (as of 2016).