Shares of Reliance Communications ended lower on Friday amid reports that Aircel is likely to file for bankruptcy under the Insolvency & Bankruptcy Code.
The stock fell 4.87 percent lower at 20.50 level on the BSE.
However, an Aircel spokeperson denied any move to file for bankruptcy under the Bankruptcy Act, the Economic Times (ET) reported.
Earlier, a report by ET cited a CNBC TV 18 report saying that the merger was unlikely as Ericsson has moved National Company Law Tribunal (NCLT) against RCom.
Aircel's total debt stood at Rs 16,000 crore, which includes Rs 12,000 crore of India debt.
Reliance Communications and Aircel in September last year announced the merger of their wireless operations to create a combined entity with assets worth Rs 65,000 crore.
The transaction would reduce RCom's debt by Rs 20,000 crore (USD 3 billion), while Aircel's debt would go down by Rs 4,000 crore (USD 600 million) on closing in 2017, the companies had said last year.
RCom had announced it will merge its wireless telecom business with smaller rival Aircel to create what will be the country's 3rd-biggest mobile phone operator, with asset base of more than Rs 65,000 crore and net worth of Rs 35,000 crore.
Both the companies would transfer Rs 14,000 crore of debt each to the joint venture, taking the total debt of the new company to Rs 28,000 crore.