RCom-MTN talks to continue till July 21

{image-reliance communications_09072008.jpg news.oneindia.in}Mumbai, Jul 9: Reliance Communications today announced that its negotiations with the South African telecom major MTN has been extended till July 21.

The 45-day exclusive negotiations over the deal between the two telecom giants over a potential business combination to conclude yesterday. The negotiations commenced on May 26. RCom in a release here stated that the two companies have now agreed to continue their negotiations and have extended the period of exclusivity until July 22.

The release as a guidance to the shareholders said that a further announcement would be made at an appropriate time. ''It is to be noted that there is no certainty either on completion, or the timing of the said proposal,'' it said and advised shareholders to exercise caution in their dealings in the companies' securities dealings until a further announcement is made.

The negotiations pertained to Reliance Communications swapping stakes with the MTN so that the amalgamated entity emerge one of the top ten telecom majors in the world. MTN had earlier been approached by another Indian telecom major Bharati for taking a majority share in the South African telecom giant. However, the deal feel through as it could not get the approval of the MTN board.

Even as the talks were a new siblings war broke out with the Mukesh Ambani controlled Reliance Industries Limited (RIL) informing MTN and RCom that it would have to invoke the right of first refusal on the sale of shares of the Anil Ambani controlled company in accordance with a part of a agreement in group asset split between the two brothers in 2006.

RCom however had rejected the RIL claim outright and thus ensued a war of letters which culminated on July 7 when RIL stated that it had invoked the dispute resolution clause of the 'non competition agreement' as RCom refused to attend a meeting it had convened on that day for reconciliation so that the amalgamation process could be smooth.

In response, RCom had stated that it was prepared to clarify any doubts raised by RIL as there was neither any 'dispute' nor any occasion for any 'conciliation' process, as claimed by RIL. RCom said that the issues contentions raised by RIL were ''legally and factually untenable and misconceived''. RCom wanted RIL to indicate a few alternate time slots in the week beginning July 14 for clarifying the doubts. RCom had also stated that it reserved all rights to take such actions as might be advised in response to the letters from RIL.

UNI