IANSOct 31, 2017 23:45:03 IST
"The Board of Directors of Reliance Communications, at its meeting held in Mumbai, took on record the demerger of Sistema Shyam Teleservices Ltd's telecom business in India, run under the brand name MTS, with the company," an RCom statement said.
"The Board also approved the issuance of shares to the tune of 10 percent of the equity shareholding of Reliance Communications, to SSTL, as part of the agreement between the two companies," the statement said. Under the terms of the agreement between RCom and Sistema, RCom will acquire the telecommunications business of SSTL including its licenses.
In addition, RCom will acquire 30 MHz of the most valuable and superior 800/850 MHz band spectrum, ideally suited for 4G LTE services and other evolving technologies, to complement its own unique nationwide footprint. This will result in an extension of the validity of RCom's spectrum portfolio in the 800/850 MHz band in eight important Circles (Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, UP-West and West Bengal) by a period of 12 years - from 2021 to 2033.
As a result of the demerger, SSTL will receive a 10 percent equity stake in the fully diluted equity share capital of RCom. In addition, RCom will assume the liability to pay the Department of Telecommunications instalments for SSTL's spectrum, amounting to Rs 390 crore per annum for the next eight years.
In another statement, Sistema said: "Sistema PJSFC, a publicly traded diversified Russian holding company, announces that it has completed the merger of its Indian telecommunications business with Reliance Communications, one of India's leading telecommunications operators. The merger has been approved by all relevant Indian regulators and courts."
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