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Airtel looking to recover RCom debt via assets acquisition

Airtel looking to recover RCom debt via assets acquisition

Bharti Airtel is among the operators interested in acquiring assets and spectrum from Reliance Communications (RCom).

A key factor in Airtel’s motivation will be the fact that RCom owes the Indian market leader INR450 billion ($6.93 billion), and obtaining some of the available assets will enable Airtel to recover some of this.

The available assets include network equipment, fibre cables and spectrum in the valuable 800MHz band, as well as in the 1.8GHz and 2.3GHz bands. While operators will be interested in the spectrum, most have sufficient airwaves following the last round of auctions so are unlikely to bid too competitively for RCom’s holding.

RCom’s assets are being sold by a consortium of Indian and international banks, with the sale managed by SBI Capital Markets – the investment arm of the operator’s largest creditor, the State Bank of India. The assets are expected to be sold off separately.

Several companies, including Bharti Infratel, Brookfield Asset Management, and Indus Tower, have expressed interest in obtaining some of RCom’s assets. Interested parties have until 12th December to make non-binding offers.

Reports last month pointed to RCom closing down the majority of its wireless operations in November following the collapse of its merger with Aircel, which was itself prompted by the operator’s struggles with intensifying competition in the market. RCom cited “inordinate delays caused by legal and regulatory uncertainties” as the main cause of the merger’s failure.

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