RCOM and Aircel merge their wireless operations (India)
Reliance Communications (RCOM) has signed definitive agreements to merge its wireless operations with Aircel’s wireless business. This is being considered the largest-ever consolidation deal in the Indian telecom sector. RCOM and Maxis Communications Berhad (the Malaysia-based parent company of Aircel) will hold 50 per cent stake each in the merged entity, with equal representation on the board of directors and all committees. The merged entity will be considered a special purpose vehicle and will be managed by an independent professional team under the supervision of the board. It is likely to be one of India’s largest private sector companies, with an asset base of over Rs 650 billion and a net worth of Rs 350 billion. On completion of the transaction in 2017, RCOM will transfer Rs 200 billion of its debt to the new entity, including Rs 140 billion of long-term debt and Rs 60 billion of instalments payable to the Department of Telecommunications (DoT) over 10 years for spectrum purchases by RCOM and Sistema. Aircel will also transfer Rs 140 billion of its debt to the entity. The merged entity may reportedly later look for a third partner by diluting about 25 per cent equity to raise around Rs 60 billion.
RJIL to raise Rs 150 billion through preference shares
Reliance Jio Infocomm Limited (RJIL) will raise Rs 150 billion by issuing optionally convertible preference shares (OCPS). This will replace its rights issue for the same amount that the company had approved in July 2016. According to RJIL, each OCPS would be redeemed at Rs 50 or converted into five equity shares of Rs 10 each at any time at the company’s option. However, this can happen not later than 10 years from the date of allotment of the preference shares. RJIL has not provided a reason for changing the instrument of raising funds.
GTL Infrastructure’s lenders approve the company’s proposal to convert loans to shares
The lenders of GTL Infrastructure, including Indian Overseas Bank, Punjab National Bank, Union Bank, Corporation Bank and Bank of Baroda, have approved the company’s proposal to convert loans to shares, thereby taking the majority stake in the company and selling it to a strategic investor. As per the plan, the company’s debt will be reduced to sustainable levels as specified in the Reserve Bank of India’s guidelines for strategic debt restructuring, from Rs 82 billion to around Rs 48 billion. The company will further reduce debt by Rs 3 billion through cash flows and by selling non-core assets such as properties or customer settlements.
RCOM likely to sell a majority stake in Reliance Infratel to Brookfield Asset Management
RCOM is reportedly in talks with Brookfield Asset Management for selling a majority stake in Reliance Infratel. The companies are currently in bilateral negotiations after signing a non-binding agreement in July 2016. The due diligence exercise is on. At present, RCOM holds a 96 per cent stake in Reliance Infratel and the rest is held by institutional investors including George Soros’ Quantum, New Silk Root Partners, Galleon, HSBC Daisy Investment (Mauritius), Drawbridge Towers and Investment Partners.
BTRC receives $180 million in loan for satellite launch (Bangladesh)
The Bangladesh Telecommunication Regulatory Commission (BTRC) has signed a loan agreement worth about $180 million with the Hongkong and Shanghai Banking Corporation (HSBC) to finance the launch of the country’s first-ever satellite, Bangabandhu-I. The loan has a 12-year tenor with an annual interest rate of 1.51 per cent, and has to be repaid in 20 instalments. Earlier, in November 2015, BTRC had signed a $248 million deal with France-based Thales Alenia Space for the satellite project. The satellite is scheduled to be launched in December 2017 and will make Bangladesh the 54th country in the world to own a satellite.
Telekom Malaysia to increase stake in webe (Malaysia)
Telekom Malaysia (TM) has decided to increase its stake in webe (formerly Packet One Malaysia) via its Mobikom unit. To this end, it will subscribe to $122 million worth of convertible medium-term notes (CMTNs). The proceeds of this subscription will be utilised to fund the implementation of webe’s business plan. Subject to the conversion of these notes into shares, the move can increase TM’s stake in webe to 82 per cent. However, TM’s shareholding in the ordinary equity of webe will remain at the current 72.9 per cent, subject to further conversion of the CMTNs and/or exchange and conversion of the exchangeable medium-term notes into webe’s shares. Earlier, in February 2016, TM had increased its holding in webe from 55.3 per cent to 72.9 per cent after an early conversion of the first-tranche CMTNs issued by the latter.
MTN secures loan worth $1.3 billion (South Africa)
The MTN Group has entered into loan agreements to raise more than $1.3 billion from local and international banks and financial institutions. These financing arrangements are in line with MTN’s funding strategy, which aims to improve its debt maturity structure on an ongoing basis and maintain adequate bank facility headroom to support its credit rating.