B.S.V. Prakash Kumar, Member - (1.) These are the Company Scheme Petitions filed under Section 230-232 of the Companies Act, 2013 (hereinafter referred as "The Act"), seeking approval for a Scheme of Arrangement between Reliance Infratel Ltd. (Transferor Company- "RITL") and Towercom Infrastructure Pvt. Ltd. (Transferee Company -"Towercom") basing on the Order dated 23rd March, 2017 passed by this Bench in CSA 185/2017 for calling and holding shareholders meeting and also to issue notices to the members and the creditors of the company and Government Authorities including Regulating Authorities in respect to holding meeting of members to approve the Scheme proposed by the applicant companies namely RITL and Towercom.
(2.) The background and rationale to propose this Scheme is that Reliance Communications Ltd. (RCL) is a flagship company of Reliance Group with an integrated telecommunication service having customer base of nearly 96 million including over 2.6 million individual overseas retail customers. Since RCL has a passive infrastructure of telecom towers, to carry on this commercial activity of providing infrastructure, RCL set up and transferred its passive infrastructure assets to RITL in 2007 and since then, it has been carrying on its business of providing passive infrastructure through the medium of RITL, by which, RITL is engaged in the business of providing telecom infrastructure services which inter alia comprise tower business and the remaining business. Both these business activities having significant potential for growth, the nature of risk and returns involved in both these business activities are distinct and consequently each business attracting a different set of investors, strategic partners, lenders and other stake holders, keeping this commercial facts into consideration, RCL has been exploring various opportunities including disinvestment or obtaining strategic investors for the said tower business and has for that purpose examined various proposals for re-organization of the Transferor company. In pursuance thereof, RCL has entered into a binding Share Purchase Agreement, pursuant to which, an associate of the Brookfield Group (Canada Company) has agreed, subject to the receipt of the relevant regulatory approvals and performance of other conditions agreed between them, that Brookfield would acquire an operational interest in Towercom. As per the Agreement, once the tower business is transferred from RITL on a going concern basis into Towercom and if all the other preconditions met, Brookfield would acquire specified shares of Towercom. To make it through, this Scheme is entered into by RITL and Towercom for diverse commercial reasons with a view to achieve the benefits of increasing shareholders' value by leveraging diversified investment opportunities, attribution of appropriate risk and valuation to different business based on their respective risk return profile and cash flows, simplified and transparent business structure resulting into better management focus on the business and achieving operational efficiencies and also enabling transfer of Towercom to Brookfield.
(3.) With this rationale, when RITL and Towercom filed the Company Scheme Application 185/2017 to get an order for calling and holding shareholders meeting to take the approval of the members for the Scheme of Amalgamation as proposed by the boards of the respective companies, this Bench on 23rd March, 2017 u/s. 230(1)(b) of the Act ordered to hold shareholders meetings (including a meeting of preference shareholders) of the respective companies for approval of the shareholders by sending notices to the members and creditors of the company as mandated under Section 230(3) and also notices under Section 230(5) of the Act to the various Government Authorities to appraise that shareholders meeting of the respective companies would be held as mentioned in the order passed by this Bench, so that, if any of them have any objection for granting the Scheme proposed by the Petitioners, i.e. RITL and Towercom, they could raise their objections.;