RInfra, GTL merger off
The proposed R50,000-crore deal between Anil Ambani-owned Reliance Infratel and GTL Infrastructure to merge the two entities has been called off, the companies informed the stock exchanges on Monday. HT reports. Call failure: A towering fall?business Updated: Sep 06, 2010 23:51 IST
The proposed R50,000-crore deal between Anil Ambani-owned Reliance Infratel and GTL Infrastructure to merge the two entities has been called off, the companies informed the stock exchanges on Monday.
The companies did not give any reasons for calling off the agreement.
However, sources said that the two sides could not agree on the financial structuring of the deal. Another concern of GTL was to maintain the independent character of the merged entity, sources said.
RCom, which owns Reliance Infratel, said that it is "now engaged in discussions with certain other strategic and financial investors to pursue a similar transaction". "An appropriate announcement will be made in due course," the company said in a statement.
The deal would have reduced a significant part of RCom's debt. The company has a debt of about R30,000 crore, according to company executives. About R18,000 crore would have gone to the merged entity.
"The non-binding term sheet signed by both parties dated June 27, 2010 expired on August 31, 2010," said GTL Infra in a filing to Bombay Stock Exchange.
"Despite efforts, both parties have neither extended the term sheet nor entered into any definitive transaction agreements as envisaged therein. Consequently, the process of merger as originally contemplated would not take place," it said.
On June 27, the boards of GTL, RCom and its subsidiary Reliance Infratel had given in-principle approvals to the R50,000-crore deal to create the world's largest independent telecom infrastructure company, neither owned nor controlled by any telecom operator.