GTL Infra puts off plans to merge with Rel Infratel

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Dealing a blow to telecom major Reliance Communications ' efforts to reduce its debt, GTL Infrastructure on Monday canceled its deal to merge RComm's subsidiary Reliance Infratel, with itself, reports CNBC-TV18.

In June this year, the boards of the two companies gave their in-principle approval for the Rs 50,000-crore deal to create the world's largest telecom infrastructure company with about 80,000 towers.

The non-binding term sheet signed by the companies expired on August 31, GTL said in a statement adding, "Subsequently despite efforts, both parties have neither extended the term sheet nor entered into any definitive transaction agreements".

In an interview with CNBC-TV18 on August 16, 2010, Syed Safawi, company head of Reliance Communications' wireless business, had said that the deal was well underway and the details were getting worked out. "We should see closure in the next four to six months. That's the time line estimate that we have. Probably by next quarter we should have some more clarity on that."

Meanwhile, Reliance Communications said that they are in discussion with other strategic & financial investors, which will take shape post expiry of term sheet with GTL Infra. The company said it will pursue similar transaction aimed at reducing debts and may even unlock value in Reliance Infrastructure.