RCom files application for withdrawal of tower biz demerger

New Delhi: Reliance Communications on Wednesday said it has filed an application with the National Company Law Tribunal (NCLT) for withdrawal of the scheme of demerger of its tower business.

The tower business demerger scheme is being withdrawn as RCom's tower deal with Brookfield is currently being reworked following termination of wireless merger talks with Aircel, a company source explained.

An RCom statement said: "The RITL tower demerger scheme shall, in due course, be taken up for application with the required changes".

Reliance Infratel Ltd is a subsidiary of Reliance Communications and holds the company's tower assets, numbering 43,000 towers.

The Aircel tenancies would have been a sweetener for Brookfield in the tower deal, but the recent collapse of merger talks between RCom and Aircel has prompted a renegotiation on contours of the deal between the Anil Ambani company and the Canadian firm.

The renegotiated deal will be filed afresh with the NCLT in a new demerger petition, the source said. The original deal envisaged Brookfield picking up a 51 per cent stake in RCom's tower business, and carried a deal value of Rs 11,000 crore.

The valuation was, however, based on the combined Aircel-RCom entity offering tenancies post-merger to the tower company, analysts had said.

"As announced in the media release by the company on October 1, 2017 and for reasons already stated, the merger agreement for the combination of RCOM's wireless business with Aircel has been allowed to lapse with mutual consent," the RCom statement said. Accordingly, it said, an application for withdrawal of the said merger scheme has been filed with NCLT on October 3, 2017.

"Furthermore, as a consequence, the application for the withdrawal of the scheme of the demerger of the tower business under RITL has also been concurrently filed as on 3 October 2017," the statement added.

Reliance Communications, which is reeling under a debt of about Rs 47,000 crore, had cited "legal and regulatory" delays for termination of merger talks with Aircel.