By IANS,
Mumbai : The shares of Reliance Communications, which is in tie-up talks with South African telecom giant MTN, fell 1.7 percent Monday over a rival group’s claim that it has the first right over its majority equity, should it be sold.
The shares of the company opened slightly higher at Rs.545, against the previous close at Rs.543.35 and moved higher to the day’s high of Rs.549.70. The scrip finally settled lower at Rs.531.00 with a loss of 1.52 percent.
The 52-week high for the scrip was Rs.844 on Jan 10.
The claim by Mukesh Ambani-led Reliance Industries has, however, been countered by Reliance Communications, which is a part of his younger brother’s Reliance Anil Dhirubhai Ambani Group (RADAG).
Reliance Communications and MTN have been in talks for a possible consolidation of operations, but the issue took a twist when the Mukesh Ambani-led group said under a family pact, his group had the first right of refusal to buy controlling stake in Reliance Communications.
But Reliance Communications, which has also threatened legal action against the Mukesh Ambani-led group, has refuted the claim and said the family pact was not binding since officials of Reliance Industries alone signed it.
The two groups were carved out after a split in the business empire created by the late Dhirubhai Ambani and both his sons, now estranged, are part of the elite Forbes rich list.
Reliance Communications has been attracted by MTN’s 70 million customers in 21 countries, including South Africa, Nigeria, Iran and Cyprus and its impressive balance sheet, showing a net profit of $1.58 billion on revenues of $9.62 billion.
And for the South African company, a consolidation will result in access to 48 million customers of Reliance Communications, covering 15,000 towns and 400,000 villages in India on a network of 165,000 km of optic fibre cables.