The shareholders of Reliance Communications have approved its 99.99 percent majority for demerger of its wireless division into Aircel Limited and Dishnet Wireless Limited.
"The shareholders of Reliance Communications at their meeting convened pursuant to the order of the National Company Law Tribunal (NCLT), have on Monday approved with 99.99 per cent majority for the Scheme of Arrangement for demerger of the wireless division of the company and Reliance Telecom Limited (RTL), a wholly-owned subsidiary of the company, into Aircel Limited and Dishnet Wireless Limited (the Scheme)," the company statement said.
The company has already received approval from the Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited and Competition Commission of India for the proposed Scheme of Arrangement.
The Shareholders of Aircel Limited have also approved the said Scheme at their meeting held on April 22nd, 2017, convened under the order of the NCLT.
The merger will create a strong operator clearly ranked amongst India's top 4 telcos by customer base and revenues, also ranking amongst the top 3 operators by revenues in 12 important circles.
The merged entity will have the second-largest spectrum holding amongst all operators, aggregating 448 MHz across the 850, 900, 1800 and 2100 MHz bands, and will enjoy enhanced business continuity through the extended validity of spectrum holdings till 2033-36.
"It will be one of India's largest private sector companies, with an asset base of over Rs. 65,000 crores ($ 10 billion) and net worth of Rs. 35,000 crore ($ 5.38 billion)," the statement said.
RCOM's overall debt including the deferred spectrum payment liability will be reduced by Rs. 20,000 crore ($ 3.07 billion) and Aircel's debt will reduce by Rs. 4,000 crore ($615million) upon completion of the transaction.
A petition is being filed with the NCLT, Mumbai Bench, for approval of the said Scheme. The proposed transaction is subject to other necessary approvals.
Post closing, the company and the present shareholders of Aircel Limited will hold 50 percent stake each in Aircel Limited.