RCOM and SSTL seek permission for merger

14 Jan 2016

The planned merger of Reliance Communications (RCOM) and Sistema Shyam Teleservices (SSTL) has been cleared by the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), and the duo will shortly apply to the Rajasthan and Bombay High Courts for their approval of the transaction, the Economic Times writes. As previously reported by TeleGeography’s CommsUpdate, the deal will see SSTL’s mobile business demerged into RCOM, whilst SSTL will take a 10% equity stake in the latter. Further, RCOM will acquire SSTL’s LTE-suitable spectrum in the 800MHz range, thereby extending the validity of RCOM’s 800MHz frequencies in eight circles – Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, Uttar Pradesh West and West Bengal – by twelve years, from 2021 to 2033. RCOM will also assume the liability to pay the outstanding instalments to the Department of Telecommunications (DoT) for the spectrum, equating to around INR3.92 billion (USD59.83 million) per year for the next ten years. Prior to the closing of the transaction, however, SSTL intends to pay off its existing debt.

India, Reliance Communications (RCOM), Reliance Jio Infocomm (Jio)