Reliance Comm to merge Infocomm
SIBU BABU
Questia
Mumbai, March 13, 2006
Reliance Communications Ventures Ltd, a holding firm for Reliance's
telecoms business, unveiled a restructuring plan on Sunday aimed at
fully owning its operating arms, including Reliance Infocomm.
Reliance Communications Ventures (RCVL), which listed on March 6, was
spun off to shareholders of energy conglomerate Reliance Industries Ltd
after settlement of a dispute between the Ambani brothers who run the
Reliance group.
The company said in a statement that under the previous structure, RCVL
had the disadvantage of not owning a majority stake in any of its
operating companies.
RCVL holds 45.3 per cent of Reliance Infocomm, 45 percent of Reliance
Communications Infrastructure and 35.6 per cent of Reliance Telecom.
The restructuring, which will give RCVL complete ownership of all the
operating companies, assets and franchisees, will be through a share
swap and will not involve any cash outgo, the statement said.
Reliance Infocomm, India's top CDMA mobile services provider, will be
merged with RCVL, while the other companies will be wholly-owned
subsidiaries.
RCVL ranks second in terms of mobile customers behind $17.5-billion
rival Bharti Tele-Ventures Ltd, India's only other listed telecoms firm
with a nationwide footprint.
It is now also the listed flagship of Anil Ambani's Anil Dhirubhai
Ambani Enterprises group, which also has interests in utilities, mutual
funds, financial services and media.
After a public and very bruising spat last year, the younger Anil took
control of RCVL. Elder brother Mukesh controls top petrochemical giant
Reliance Industries Ltd.
Reliance Communications has a market share of 19.6 per cent, compared
with 22.1 per cent for Bharti in India's mobile telephony market.
After the restructuring, the founders of Reliance Communications will
hold 63 per cent stake, foreign portfolio investors and retail
investors will hold 14 percent each, domestic institutions will own
five per cent and global depositary receipt holders will own four per
cent.