UAE origin Etisalat buys RCOM shares

Etisalat, UAE’s big telecommunication sector having its network across 18 countries and rendering services to more than 100 million customers is on the verge to acquire 25% stake in Reliance Communication, owned by Anil Ambani.

Information received from the market sources is that negotiations are continuing for the deal to get materialized which would be almost Rs 18,000 crore, once the deal gets through and Etisalat after acquiring 25% in Reliance Communication, it would further go for an open offer to get 20% more from public subscription.

Neither RCOM nor Etisalat officials showed the interest to comment about the deal’s further development. It was that some factual information regarding the decision was received from the reliable sources close to the main talks.

Anil Ambani’s present RCOM equity holding is 67.58% and the public and other institutional investors own the remaining stake. When the offer once gets materialized the RCOM company’s  paid-up capital will mount up by 25%, which will reduce Anil Ambani’s stake ownership to almost 55%.This deal will help to a great extent for the Reliance Communications to better position in the capital-intensive sector.

For Etisalat, to get its deal done, it will have to first exhaust its current holding in Etisalat DB Telecom. As per the rules, a company cannot have more than 10% holdings in two or more companies. Etisalat has 45% stake in Etisalat DB Telecom, which will have to be sold for buying RCOM 25% holdings.

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