RCom received go-head from Indian bourses to acquire Sistema Shyam Teleservices
"We wish to inform you that we have received observation letter from BSE Ltd and National Stock Exchange of India Ltd (NSE)," Reliance Communications said in a BSE filing.
Russian tycoon Vladimir Evtushenkov-controlled AFK Sistema currently holds 56.68% stake in SSTL while the government owns 17.14% interest. Shyam Group has 23.98% stake and the rest is owned by small investors.
SSTL offers mobile telephony services under the MTS brand across nine telecom circles in the country.
The deal will give RCom access to spectrum or airwaves in the 850MHz band,which can be used for 4G services that it plans to start by the year-end.
Also, RCom will be able to extend the validity of its licence by 12 years in eight high revenue generating circles of Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, Uttar Pradesh (West) and West Bengal.
As per the deal, SSTL will hold about 10% stake in RCom and pay off its existing debt before closing the deal. RCom will assume the liability to pay the government instalments for SSTL's spectrum, amounting to Rs 392 crore per annum for the next 10 years.
According to media reports, the merger will not only help RCom compete with present players but also secure its position ahead of Mukesh Ambani’s foray into the sector with 4G services under Reliance Jio brand later in 2016.
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