Indian telecoms operator RCom’s plan to merge its DTH platform with local cable company Digicable is reportedly being investigated by the country’s Information and Broadcasting Ministry.
To get around cross holding rules that prohibit cable and DTH…
Indian telecoms operator RCom’s plan to merge its DTH platform with local cable company Digicable is reportedly being investigated by the country’s Information and Broadcasting Ministry.
To get around cross holding rules that prohibit cable and DTH groups from owning more than 20% of each other, RCom plans to invite PE firm Ashmore to take a stake in the combined entity, called Reliance Digicom, according to local reports.
Reports suggest this planned cashless deal would see Ashmore acquire a 28% stake in Reliance Digicom, while 10% would be held by Stellar Holding, which will be controlled by the CEO of Digicable, Jagjit Singh Kohli. The rest of Reliance Digicom would be held by RCom.
But despite getting initial clearance from India’s High Court, the plan is now allegedly under scrutiny from the I&B Ministry.
Ashmore declined to comment, while RCom and Digicable were unable to reply to questions before going to press.
However, one local daily on 14 July cited Digicable’s Kohli reaffirming that the planned deal had been structured in a way that meant there were no cross holding issues, either directly or indirectly.
If Reliance Digicom does pass regulatory tests, it will become one of the largest distribution and broadband companies in Asia, with a reported 15 million subscribers.
