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Tag: RCom

  • RCom chief spared jail over debt to Ericsson

    RCom chief spared jail over debt to Ericsson

    Reliance Communications (RCom) has terminated a deal to sell its telecom assets to Reliance Jio Infocomm after failing to receive regulatory approval.

    But RCom’s founder Anil Ambani has been granted a last-minute reprieve from being imprisoned for failing to meet the company’s court-ordered repayment obligations to major creditor Ericsson after support from his older brother and founder of Reliance Jio Mukesh.

    In a stock exchange filing, RCom blamed its decision to terminate its asset sale plan to factors including a failure to receive the required permissions from the Department of Telecom.

    RCom also has not received notice of consent or objection from more than 40 of its foreign an Indian lenders regarding the proposed sale, despite holding over 45 meetings over a 15 month period, the company said.

    RCom has also decided to attempt fast track resolution of its overall debt through the National Company Law Tribunal, and the Tribunal has restrained the company from selling or transferring ay assets while the case is ongoing.

    But due to last minute intervention from Mukesh Ambani, RCom revealed in a second statement that the company has managed to make the required 5.5 billion rupee ($80.1 million) payment to Ericsson before the deadline for him to be jailed.

    Ambani was last month found to be in contempt of court over a failure to make the 5.5 billion rupee payment RCom had promised to make to Ericsson in September. He was given four weeks to make the payment or face being jailed for three months.

    “My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita, for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support,” Anil Ambani said in a statement.

    “I and my family are grateful we have moved beyond the past, and are deeply grateful and touched with this gesture.”

    Ambani was referring to the fallout the two brothers had over the inheritance of Reliance Industries from their father Dhirubhai Ambani following his death in 2002. The brothers have since reconciled.

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  • RCom faces fresh hurdle over wireless asset sale

    RCom faces fresh hurdle over wireless asset sale

    Reliance Communications has been hit with a fresh roadblock to its attempt to sell its tower and fiber assets to Reliance Jio Infocomm.

    India’s National Company Law Appellate Tribunal (NCLAT) has withdrawn aninterim order that had cleared RCom to proceed with the asset sale.

    RCom has instead been instructed to wait until the outcome of an NCLAT ruling to be released next Wednesday.

    The NCLAT’s about face was prompted by a Supreme Court decision staying the interim order, which was in response to a petition to India’s apex court from HSBC Daisy Investments, which represents a group of investors holding nearly 5% of RCom.

    RCom is still free to proceed with the sale of its spectrum, real estate and media convergence node assets as part of its 250 billion rupee ($3.02 billion) asset fire sale.

    The operator is planning to exit the wireless market and monetize other assets in order to avoid insolvency as a result of mounting debt. The zero writedown debt restructuring program is expected to reduce RCom’s residual net debt by around 390 billion rupees ($5.89 billion).

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  • RCom gets court approval to sell wireless business

    RCom gets court approval to sell wireless business

    India’s Supreme Court has cleared Reliance Communications (RCom) to sell its wireless assets to Reliance Jio Infocomm for 250 billion rupees ($3.85 billion), vacating two stay orders on the sell-off.

    The court has vacated a stay on the sale of spectrum, media convergence nodes and real estate, and has directed the National Company Law Appellate Tribunal (NCLAT) to vacate the stay on the sale of the operator’s tower and fiber assets, RCom announced.

    In an interim order, the NCLAT has complied with the Supreme Court’s direction, but will require the proceeds from the tower and fiber asset sale to be deposited into an escrow account.

    Distribution of the proceeds will be subject to a final decision by the NCLAT expected next Wednesday.

    RCom arranged to sell off its wireless business to Reliance Jio Infocomm as part of a radical debt reduction program.

    But the tribunal issued an order prohibiting the sale of assets without court permission in response to an insolvency petition from Ericsson seeking a recovery of around $177.8 million in unpaid dues.

    According to RCom, minority investors are making a claim for part of the proceeds of the sale of its tower and fiber assets, a claim that the operator fully disputes. Based on legal advice, RCom estimates that this claim can be for at most 2 billion to 3 billion rupees worth of the proceeds.

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  • RCom to stop offering 2G voice in eight circles

    RCom to stop offering 2G voice in eight circles

    Struggling Indian operator Reliance Communications will stop offering 2G voice services in eight circles from December as a cost saving measure.

    Telecoms regulator Trai has issued a direction stating that RCom plans to discontinue 2G GSM services in eight telecoms circles after the closure of the merger between RCom and Sistema Shyam Teleservices (SSTL), providing only 4G data services.

    RCom also plans to use the merger to upgrade its network from CDMA to LTE using the 800-MHz band in nine circles including Delhi.

    Trai has requested that all operator honor any porting requests from existing RCom customers and directed RCom not to deny any such requests from its own subscribers until the end of the year.

    RCom has been reconsidering its operations after failing to clinch a proposed merger with Aircel due to regulatory uncertainty and the objections of some creditors.

    The operator is grappling with debt of around 450 billion rupees ($6.95 billion) and had been hoping that the merger could help it reduce this burden.

    The RCom-SSTL share swap merger by contrast was approved last month. RCom will acquire around 2 million new customers, as well as 30 MHz of 800-MHz spectrum in eight of India’s 22 telecoms circles including Delhi.

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  • RCom cleared to merge with SSTL

    RCom cleared to merge with SSTL

    India’s Reliance Communications (RCom) has secured approval from the Department of Telecom to merge with Sistema Shyam Teleservices (SSTL), operator of the MTS India brand.

    The telecoms ministry has granted final approval for the share swap deal.

    Under the terms of the merger agreement, SSTL shareholders will receive a 10% stake in RCom. RCom will meanwhile take on SSTL’s spectrum installment payment obligations, which amount to 3.9 billion rupees ($59.9 million) per year for eight years.

    RCom will in return acquire around 2 million new customers, as well as 30 MHz of 800-MHz spectrum in eight of India’s 22 telecoms circles including Delhi.

    The operator projects that the merger will contribute additional annual revenue of around 7 billion rupees. RCom reported total revenue of 35.9 billion rupees for the year ending in June, down 33% year-on-year.

    RCom had also been pursuing a merger with Aircel as part of the wave of consolidation sweeping India’s mobile market, but this deal collapsed recently due to regulatory uncertainty and opposition from some of the operator’s creditors. The operator is seeking to reduce its roughly $6.8 billion in debt by around $3 billion, and may pursue an asset fire sale to achieve this goal.

  • RCom-Aircel merger deal collapses

    RCom-Aircel merger deal collapses

    India’s Reliance Communications (RCom) has called off a planned merger of its wireless business with rival Aircel as a result of regulatory uncertainty and opposition from some creditors.

    RCom had been planning to merge its wireless business with Aircel to create a 50:50 joint venture with Aircel parent company Maxis, in a deal aimed at reducing its debt burden by around $3 billion.

    But the company announced on Sunday that its merger agreement with Aircel has now “lapsed by mutual consent” due to “legal uncertainties” and “interventions by vested interests” – referring to creditors to the company.

    RCom will now have to pursue alternative methods of reducing its substantial debt burden of around 450 billion rupees ($6.8 billion).

    LiveMint reports that the operator now plans a fire sale of assets ranging from spectrum to real estate as part of a plan to reduce its debt by around 250 billion rupees. This will partly involve adopting a 4G focus to allow it to monitize its existing 2G and 3G spectrum.

    RCom is also planning to sell its tower business and had been seeking to fetch around 110 billion rupees from the sale, but this will need to be revised now that Aircel’s tenancies will no longer be included in the deal.

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  • RCom gets seven-month debt reprieve

    RCom gets seven-month debt reprieve

    India’s Reliance Communications (RCom) has been granted a seven-month reprieve from its debt repayment obligations to give it time to complete its proposed merger with Aircel and a planned sale of a stake in its mobile tower operations.

    In a media release, RCom said its lenders have agreed to a standstill on debt servicing obligations until December 2017 in response to the advanced stages of negotiations over the two transactions.

    The merger with Aircel to create an entity which it has been recently revealed will be named Aircom, as well as a sale of a controlling stake in its tower business to Brookfield Group, are expected to reduce RCom’s debt burden by around 60% to around 200 billion rupees ($3.1 billion).

    RCom has also agreed to develop sustainable long term plans to pay off the remaining debt. If the transactions are not completed by this time, lenders will be able to convert their debt into shares, the company said.

    RCom’s proposed merger with Aircel is expected to create India’s third largest mobile operator with a subscriber base of around 186 million. RCom will hold a 50% stake of the combined company, with Aircel’s parent company – Malaysia’s Maxis Communications – owning the remainder.

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  • Telenor India said to seek merger with RCom, Aircel

    Telenor India said to seek merger with RCom, Aircel

    Norway’s Telenor is reportedly seeking to get in on the proposed merger between Aircel and Reliance Communications.

    Telenor is proposing to combine its Indian business, customer base and spectrum with the merged Aircel-RCom entity. Under the proposed terms, Telenor would own 10% of the combined company, while Aircel parent Maxis and RCom would each own 45%.

    The report cites a telecoms industry executive as stating that negotiations between the three commenced around Christmas, but have been in limbo after the Supreme Court threatened to revoke Aircel’s license if promoted Ananda Krishnan didn’t appear for a corruption case. As part of the decision the court also issued an interim ban on the sale of Aircel’s 2G spectrum.

    Telenor is also reportedly in parallel discussions with Bharti Airtel, even though Airtel has only offered cash value for Telenor’s spectrum rather than a proposed merger. The sources stated that Telenor is eager to exit India as soon as possible and will take the Airtel deal if it will close faster.

    RCom last year agreed to merge with Sistema Shyam Teleservices as part of the wave of telecoms industry consolidation.

    A combined RCom, Telenor, Aircel and SSTL would have a total subscriber base of around 236 million, making it India’s second largest operator behind Bharti Airtel, which has nearly 260 million customers.

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  • India’s RCom to merge with Aircel

    India’s RCom to merge with Aircel

    India’s Reliance Communications has arranged to merge its mobile business with rival Aircel to create one of India’s top four operators by customers and revenue.

    The deal is expected to be the largest ever consolidation in the Indian telecoms sector, RCom said in a stock exchange statement.

    Under the arrangement, RCom and Aircel’s parent company, Malaysia’s Maxis Communications, will combine their Indian mobile assets to form a 50:50 joint venture. Both RCom and Maxis will have equal board representation.

    The transaction is expected to take place in 2017. Through the deal RCom expects to reduce its overall debt by around $3 billion, or over 40% of its total, while Aircel expects to cut its debt by $600 million.

    The merged company will have the second largest spectrum holding among all Indian operators, with 448 MHz aggregated across the 850-MHz, 900-MHz, 1800-MHz and 2100-MHz bands. It will be a top three operator in 12 key cities.

    “We are delighted to have taken the lead in consolidation of the Indian telecom sector, first with RCom’s acquisition of the wireless business of SSTL, and now, with the combination of our business with Aircel in a 50:50 Joint Venture with [Maxis],” Reliance Group chairman Anil Ambani said.

    Maxis commented that the company has invested over $5.2 billion in Aircel since acquiring the company in 2006, marking one of the largest foreign investments in India.

    RCom’s data center, fiber and related infrastructure operations will remain separate following the merger. The deal still requires shareholder and regulatory approvals.

  • RCom to upgrade CDMA network to 4G from May

    RCom to upgrade CDMA network to 4G from May

    India’s Reliance Communications (RCom) has revealed plans to progressively upgrade its CDMA customers to 4G starting in May.

    The operator will upgrade its CDMA network to LTE using the newly liberalized 800-MHz spectrum starting on May 4, citing a letter sent from the company to the Department of Telecom.

    RCom will progressively move its roughly 5 million CDMA customers onto 4G as the rollout progresses.

    RCom has already liberalized its 800-MHz spectrum in 16 of India’s 22 telecom circles and recently received clearance from India’s cabinet to do the same in four more.

    The first round of spectrum liberalization cost a hefty 53.83 billion rupees ($806.5 million), while the second will cost around 1.3 billion rupees. In the remaining two circles, RCom has already paid for liberalized 800-MHz spectrum.

    The sources stating that RCom plans to take advantage of its spectrum sharing pact with Reliance Jio Infocomm by deploying its own network but mostly using Reliance Jio’s infrastructure to provide the 4G services.

    RCom and Reliance Jio plan to leverage each others’ spectrum to ensure they are both capable of providing pan-India 4G coverage and competing against the nation’s three largest operators, Bharti Airtel, Vodafone India and Idea Cellular, which have already launched 4G.