R-Comm not exploring merger with MTN: Sources

On Thursday, Reliance Communications had started conversations with MTN. In a press statement, both parties have confirmed that they are in exclusive negotiations for a period of up to 45 days with respect "to a potential combination or a partnership".

But there are still some doubts on what nature this partnership or potential business combination will take. It is understood from sources that this is not going to be a merger or an acquisition. It is still dicey on whether it will be a JV of some sort or not.

It is not known yet, but sources say, it is not going to be a merger or an acquisition. Reliance Communications will not take on any additional debt, nor will it issue any fresh equity, this is also source-based information. It is also interesting to note is that in this case, it was Reliance Communications that actually approached the MTN board to start exploratory talks. In the case of Bharti and MTN, it was Bharti that was pursued by MTN.

This is unsubstantiated information, a buzz that the deal could be structured by way of Anil Ambani's personal shareholding in Reliance Communications. So, that personal shareholding of Anil Ambani maybe used to structure some sort of arrangement between Reliance Communication and MTN.

A meeting has already taken place between Reliance Communication officials and MTN and more are expected to take place. Talks between both parties began on Thursday night when the MTN board had returned a revised proposal to Bharti, which Bharti said was unacceptable. So, the bottomline really is that the runaway bride is being wooed again. But the question is whether Reliance Communication is going to be the right suitor because as MTN has had talks with China Mobile, Vodafone, VimpelCom and of course most recently with Bharti. So, will Reliance Communication be able to convert this talk into a marriage is the big question now.