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RCom threatens retaliation if RIL goes legal
| The MTN deal is estimated to create a combined entity worth $70 b |
NEW DELHI: Ambani siblings’ war intensified on Saturday with the younger Anil’s group warning to retaliate in case Mukesh-led Reliance Industries goes legal with its claim on the potential multi-billion dollar amalgamation deal that the former is pursuing with South African telecom giant MTN.
In a strongly worded reply to RIL’s threat to go legal against ADAG to enforce its right of first refusal, Anil-led Reliance Communications said, “If RIL chooses to take any legal action the same will be vigorously defended by RCom, and RCom would claim cost and damages from RIL.”
The battle between the two richest Indians had flared up after RIL wrote to MTN and ADAG, copies of which were sent to the bankers, cautioning that the amalgamation deal through reverse swap would tantamount to breach of RIL’s first right of refusal to acquire a controlling stake in RCom.
Asked if the South African major saw any legal hurdles in deal with RCom and if it was seeking legal opinion on RIL’s claims, MTN Group’s spokesperson Nozipho January-Bardill told PTI in an e-mailed reply that “I cannot comment on any of your questions. MTN’s last SENS (regulatory) announcement remains as is.”
The deal is estimated to create a combined entity worth a size of about $70 billion and could have operating profits higher than RIL, India’s biggest private sector firm. Following up its strong criticism of RIL’s communication, ADA group company wrote a letter to RIL, saying, “there is no question of taking note of any alleged rights on RIL’s part... Its (RIL’s) claim is legally and factually untenable, baseless and misconceived, to be dismissed with contempt it deserves.”
In its letter to MTN, RIL had said that as per the said agreement it has “a right of first refusal in respect of tranfer of shares of Reliance Communications Limited by the Reliance Anil Dhirubhai Ambani Group.”
RIL told MTN that it has notified ADAG that it would adopt legal proceedings against them (ADAG) to enforce its rights in the Bombay High Court and would also add MTN as one of the defendants.
The copies of the letter were also sent to bankers and intermediaries in the negotiations such as Lombard Odier, Deutsche Bank, Merrill Lynch and Lazard Ltd. — PTI
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