The Hindu Business Line : RCom gets nod for demerger of optical fibre division

Mumbai, May 26 Reliance Communications (RCom) said on Tuesday that it has received shareholders’ approval for the demerger of its optical fibre division and subsequent merger with wholly-owned arm, Reliance Infratel.

The demerger will help reduce set-up and operating costs resulting in cost efficiency coupled with greater financial flexibility, RCom said in a statement to the exchanges.

Moreover, the segregation of the business (of providing telecommunications services and infrastructure) will enable both companies concentrate on their core business activities, it added

In January, the board had approved consolidation of its passive infrastructure business through a scheme of arrangement for demerger of the optic fibre undertaking of the company to Reliance Infratel.

The scheme is now subject to approvals of the Bombay High Court, the filing added.

The RCom scrip was down 9.56 per cent to close at Rs 291.45 on the BSE.

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