Reliance Comm offers merger with Aircel
Anil Ambani led Reliance Communications is believed to have proposed a merger between Reliance Communications and Aircel Limited to win over Malaysia’s Maxis in joining the Reliance-led consortium in its bid for Hutchison Telecommunications International’s (HTIL) 52% stake in Hutchison Essar. Maxis, which has launched a separate bid for the HTIL stake, owns 74% equity in Aircel which has 4.2 million subscribers in 9 circles in India.
Industry sources said Maxis has been approached by Reliance Communications to join its consortium to place a joint bid for the entire 100% stake in Hutch-Essar. Maxis would be offered shares in Reliance Communications in the proportion of funds it brings in.
Though there’s no official confirmation from either side, industry sources said that Maxis would gain from the deal as it would immediately reach out to all the 23 circles in the country, which otherwise it plans to reach by 2009.
At present, Aircel operates in nine circles, including Tamil Nadu, Chennai, Jammu and Kashmir and north-eastern states. It is shortly starting services in Himachal Pradesh and Bihar. The company has applied for licences in Mumbai, Maharashtra, Karnataka, Rajasthan, Delhi, Gujarat and Andhra.
Hunting Season
• Sources said Maxis would gain from the deal as it would immediately reach out to all the 23 circles in the country
• Maxis, which has launched a separate bid for the HTIL stake, owns 74% equity in Aircel Ltd
Industry sources said that Maxis has emerged as the only operator which could pose a challenge to Reliance in acquiring 100% stake in the country’s fourth largest telecom operator. Reliance has already roped in private equity firms like Blackstone Group, Texas Pacific Group, KKR and Carlyle to place its bid, while Standard Chartered has been appointed by Maxis.
As reported earlier by FE, Reliance is also negotiating with Hutchison Telecommunication International Ltd (HTIL) owner Li Ka-Shing of providing stake in Reliance Communications provided the deal is sealed in its favour. It is also understood to have offered to retain the present managing director of Hutch-Essar, Asim Ghosh in the same capacity. Reliance has opened negotiations with Maxis because if Ruias of Essar, who hold 33% stake in Hutch-Essar, are unable to buy out HTIL’s stake, Maxis would be its main challenger. The other contender, Orascom may face security-related concerns since it already operates in Pakistan and Bangladesh.
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