Mumbai, May 15: GTL’s (formerly Global Tele-systems) acquisition of Singapore-based Redington Group has died an early death. Less than three months after the acquisition was announced, both the companies today said that they will not proceed with the merger.
In a letter to the stock exchanges today, GTL explained that the proposed transaction envisaged certain benefits which would determine the commercial viability of the deal. These were Redington's proven relationships with over 3000 channel partners, its track record of long relationships with vendors like HP, Samsung, Cisco, TCS, Epson, CA, Canon, Compaq, Intel, Microsoft among others and its excellent relationship with bankers.
The company said, “It has now emerged that while the vendor relationships were to be extended to GTL, its continuance could not be guaranteed unconditionally over three to five years by the present shareholders of Redington as these are beyond their control.”
Further, Redington shareholders have been given financial guarantees. These guarantees, considering their significant quantum, if reflected in the GTL balance sheet will be non-viable for the company and its shareholders, GTL explained.