Reliance Communications’ (RCOM’s) shareholders have approved the proposed merger with Russian-owned cellco Sistema Shyam Teleservices (SSTL), the Economic Times reports. The agreement still needs to be accepted by SSTL’s shareholders, after which it will be passed to the Department of Telecommunications (DoT) for final approval. To date, the tie-up has already been green-lit by the Competition Commission, the Securities and Exchange Board of India (SEBI) and the High Courts of Rajasthan and Bombay.
As previously reported by CommsUpdate, the merger will see SSTL’s mobile business demerged into RCOM, whilst SSTL will take a 10% equity stake in the latter. RCOM, meanwhile, will acquire SSTL’s LTE-suitable spectrum in the 800MHz range, thereby extending the validity of RCOM’s 800MHz frequencies in eight circles and will also assume the liability to pay the outstanding instalments to the 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. In a further development, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) ruled earlier this week that SSTL would not be required to pay the DoT to rearrange its 800MHz holdings into contiguous blocks.