Reliance Communications (RCom) has called off its merger with Aircel, owned by Maxis of Malaysia, following legal and regulatory hurdles. The two companies were to merge and form an entity called Aircom, with each having 50 per cent.
This would put a question-mark on the company’s promise to its lenders to reduce its debt burden of Rs 45,733 crore by the end of December. The lenders, led by a consortium of banks, now have the option of converting their loans into equity by the end of the year and take up to a 51 per cent stake in the company.
However, RCOM has offered an alternative plan to reduce its debt by around Rs 28,500 crore. This includes selling its tower business (Rs 11,000 crore), sale of fibre (around Rs 7,500 crore), monetising real estate (Rs 1,000 crore), and also selling or trading its 2G and 3G spectrum.
According to Bureaucracy Today sources, the ball is in the court of the lenders, which might choose not to convert their loans into equity and wait for another 14 months if they are convinced that the new plan will yield results.