MTN says talks to go on with Reliance
Despite the Ambani family feud over the deal, South African telecom giant MTN today said it was still pursuing merger talks with Reliance Communications.business Updated: Jun 14, 2008 15:00 IST
South African telecom giant MTN on Saturday said its tie-up talks with Reliance Communications were still on, barely hours after the Anil Ambani-led group charged a rival corporate house with trying to derail the negotiations.
"As far as we are concerned, we have a 45-day exclusive talks agreement with Reliance Communications and nothing has really changed from our statement on May 26," MTN spokesperson Nozipho January-Bardill said.
The comments came in the wake of a letter to MTN from Reliance Industries, led by Mukesh Ambani, the estranged elder brother of Anil Ambani, saying that under a family pact between them, his group had the first right of refusal to buy controlling stake in Reliance Communications.
But Reliance Communications has refuted the claim.
"Last night, in a mala fide effort to disrupt the talks, Reliance Industries, part of the Mukesh Ambani group, has sent a communication to MTN group, making a false claim of an alleged right of first refusal to buy the controlling stake in Reliance Communications," an RDAG statement said late on Friday.
"RIL's claim is legally and factually untenable, baseless, and misconceived," said the RDAG statement. "Reliance Communications dismisses RIL's claim with the contempt it deserves."
Soon after Reliance Communications issued the statement, a spokesperson for the Mukesh Ambani-led group said its letter to MTN was issued in good faith and was merely stating the contents of the agreement reached in January 2006.
"RIL has in good faith notified both Anil Dhirubhai Ambani Group and MTN group of the stipulations contained in an agreement, the validity of which has never been questioned so far by ADAG," a Reliance Industries spokesman said.
But the statement by the Anil Ambani group said Reliance Industries based its claim on the Jan 12, 2006 agreement that was unilaterally signed only by RIL officials and found to be "unfair and unjust" by the Bombay High Court on Oct 26.
Reliance Communications and MTN had said May 26 that they were in talks for a "possible combination of their business" just days after Bharti Airtel, India's largest private telecom company, ended merger talks with the South African firm.
The group said the two entities had also agreed upon a 45-day exclusivity period to work out the modalities, during which neither party would negotiate with any other entity.
"There is no certainty either on completion or the timing of the said proposal," the two groups had said in a statement. "Shareholders are advised to exercise caution in their dealings until a further announcement is made."
Reliance has been attracted by MTN's 70 million customers in 21 countries, including South Africa, Nigeria, Iran and Cyprus and its impressive balance sheet, which shows a net profit of $1.58 billion on revenues of $9.62 billion.
And for the South African company, a consolidation will result in access to 48 million customers of Reliance Communications, covering 15,000 towns and 400,000 villages in India on a network of 165,000 km of optic fibre cables.