Reliance, GTL call off mega telecom tower deal

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Adolf Desjardins

06 September, 2010

Had the deal been materialised, it would have multiplied GTL's number of transmission towers and would have made it worth $11 billion (Rs 500 billion). The deal was called off as Reliance officials also felt that deal would not reduce debt.

GTL INFRASTRUCTURE has announced that the company has called off its deal to merge itself with Anil Ambani led Reliance Infratel. The talks ended when both sides refused to agree on a deal that could have created India's second largest operator for mobile phone towers.

A non-binding agreement that was agreed upon by the companies in June, expired on August 31. Neither of the two is now interested in extending the specified deadline. Meanwhile, Reliance has started discussions with other 'potential' investors and is also looking at the option of offering initial public offering for their tower segment.

Had the deal been materialised, it would have multiplied GTL's number of transmission towers and would have made it worth $11 billion (Rs 500 billion). The deal was called off as Reliance officials also felt that if the deal takes place, it will not reduce the company's debts.

As the announcement was made GTL's share fell by 6.72 percent to Rs 42.35 on the Bombay Stock Exchange (BSE) while Reliance's shares dropped to 1.07 percent at Rs 161.65.

Reliance had earlier mentioned that it had plans of selling 26 percent stake for a profitable premium as it would reduce the company's debts considerably. Emirates Telecommunications group Chairman Mohammad Omran had said in June that investing in Reliance was one of their top priorities as the company is also planning to expand in India.

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COMMENTS (3)

R.V.Vanarase,Satara Maharashtra

.I wish to know the ruling for installation of Mobile Towers in agricaltural land in various agricaltural land in Maharashtra State.Nobody is giving correct guidance as the news in Punyanagari daily paper at Mumbai advertising and misguiding about the mobile tower rent and advances.all the advirertises cheated to the farmers and hence you are requested to kingly guide me in the matter very early.Kindly refer your Erandavana Office and address given on the door of mumbai it is totally misguided and letters posted are reyurn to me.Also your GTL Inf.Pvt.Ltd.Erandavana Pune office staff avoided to personal visits to outsiders like me for inquiry about mobile tower installation.Kindly reply me in the matter.