Reliance Industries is believed to be conducting an advanced due diligence exercise on Aircel. The company is believed to have completed a minimum of three rounds of due diligence on the operator and may offer to purchase a controlling stake in the company if negotiations between the two companies fructify into a deal.
Reliance Industries entered the telecom sector by acquiring Infotel Broadband for close to $1 billion in 2010, giving it broadband wireless access licenses in 22 circles across India.
It is believed that Reliance Industries is chalking out a plan to expand its services portfolio to include both voice and data services. It is thus keen to buy a telecom services provider, which will give it access to back-end infrastructure and a large customer base.
Aircel has close to 60 million customers and 2G spectrum licenses to operate in 22 circles across India. The company also acquired 3G licenses in 13 circles and broadband wireless access licenses in eight circles.
Aircel had revenues of Rs 56 billion for the calendar year 2010 and posted a net loss of Rs 2.60 billion for the same period. The company is likely to have total debt of close to Rs 170 billion this year.
Malaysia’s Maxis Communications Berhad owns a 74 per cent stake in Aircel and has been holding discussions with multiple global and local telecom players to divest its holding in the company. In so far, it has failed to close a deal due to differences in valuation expectations.
