Mumbai : Punit Garg, the newly appointed executive director and president of Reliance Communication Ltd’s telecom business, told television channels that his company is open to a complete exit from the tower business. Concern about falling valuation of the Anil Ambani-led company’s tower business after the proposed merger with Aircel Ltd have raised questions over the company’s ability to repay its debt of 470 bln rupees. Speaking on the company’s plans to raise funds to service the debt, Garg said that apart from selling the tower business, the company was also considering selling fibre optic, real estate and other assets, and would be able to raise 250 bln rupees, as stipulated earlier.
According to reports, an affiliate of ssBrookfield Infrastructure Partners was reviewing a planned acquisition of 51% stake in the tower business. Garg said that a spate of lawsuits by unsecured creditors in the National Company Law Tribunal as well as clarifications sought by the Department of Telecommunications in the Supreme Court were reasons behind the mutual calling off of the company’s merger with Aircel. The company’s debt repayment plan is on track, Garg said.
RCom stock tanks
Shares of Reliance Communications (RCom) today slumped over 9 per cent in morning trade on the bourses after the company called off merger with Aircel due to regulatory hurdles. Reliance Communications, on October 1, had called off merger talks with Aircel, citing “legal and regulatory” delays. Reacting to the news, the stock of RCom Tuesday opened on a weak note at Rs 18.70, lost further ground and fell to an early-day low of Rs 17.45, down 9.11 per cent over its previous closing price.
