Hon'ble High Court, Bombay approves Scheme of Arrangement of Reliance Communications

Reliance Communications Ltd has announced that The Hon'ble High Court of Judicature at Bombay approved the Scheme of Arrangement between the Company and Reliance Telecom Ltd (RTL) and Reliance Telecom Infrastructure Ltd (RTIL) by way of demerger of the Passive Infrastructure inter alia consisting of the wireless towers (CDMA and GSM) and related infrastructure of the Company and RTL to RTIL. RTIL is a subsidiary of the Company.

The demerger of passive Infrastructure would benefit the respective Companies and the stakeholders on account of:

1. Reduced set-up and operating costs resulting in cost efficiency coupled with a greater financial flexibility.

2. Segregation of the business of providing telecommunication services and the business of providing the Passive Infrastructure facilities, thereby enabling the Companies to concentrate on its core business activities.

3. Improved quality of services to its customers by establishing highest service standards through operational agreements; and

4. Promote high valued standalone business by conversion of cost-centric assets to revenue-centric ones by sharing of the Passive Infrastructure of the Resulting Company with other wireless service providers operating in the same field.

Source : Equity Bulls

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