Reliance Giants in fighting mode
MIL/Agencies/moneycontrol, Jun 16, 2008.
Mumbai, India: June 16, 2008 - The two great Giants born of the same mother are to go for another round of fight between them. This fight is between the Ambani Brothers over Reliance Communications’ possible deal with MTN may get murkier this week.
As per the report of the PTI, MTN officials are in Mumbai to carry out due diligence on Reliance Communications.
Sources said the war of words is going to get more interesting. This week, Reliance Communications could be writing another letter to RIL.
The bone of contention is the validity of the agreement that RIL has brought to light over the weekend when they said that they have an existing agreement by virtue of which they have the right of first refusal on sale of Reliance Communications. So now, R-Comm is actually going to challenge the validity.
They have so far said that it is untenable and it is based on an agreement that was signed on January 12, 2006 unilaterally by the RIL Group. Sources said there could be more details on the actual validity of the agreement.
PTI reported over the weekend that MTN’s top officials are in Mumbai to conduct due diligence on R-Comm. There is no independent conformation on this piece of information.
Interestingly, both R-Comm and MTN sources deny that the latter's officials are currently in India. However, another source said four top MTN officials are in India. They include CFO Robert Nisbet, the M&A Head, Business Development Head, and some legal officials as well. They could be meeting RIL officials, though there is no conformation on this piece of news.
Earlier, on Friday, Reliance Industries wrote to the MTN board saying that it has right of first refusal over a sale of controlling stake in Reliance Communications. In effect, this would make any sale of controlling stake in the Anil Ambani-owned Reliance Communications to anyone but Mukesh Ambani-owned Reliance Industries illegal.
Any majority stake sale should be informed to all settlement parties, RIL said. When contacted, RIL spokesperson declined to comment on the issue.
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