Anil Ambani-led Reliance Communications on Tuesday said that it has completed the Sistema Shyam Teleservices (SSTL) merger, having received all important approvals, including the final approval from the telecom department.
RCom said that its Board of directors on Tuesday took on record the demerger of Sistema Shyam Teleservices Ltd’s telecom business in India, run under the brand name MTS, with the company.
The Board also approved the issuance of shares to the tune of 10% of the equity shareholding of Reliance Communications Limited, to SSTL, as part of the agreement between the two companies.
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 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," the telco said.
As a result of the demerger, SSTL will receive a 10% equity stake in the fully diluted equity share capital of RCom. In addition, the Anil Ambani-led telco will assume the liability to pay the DoT, instalments for SSTL’s spectrum, amounting to Rs 390 crore per annum for the next 8 years.
RCom on Monday announced a comprehensive debt resolution plan to its domestic and foreign Lenders. Under the plan, the telco would pay off up to Rs 17,000 crore of its debt, out of the proceeds of monetization of Spectrum, Towers and Fiber and MCN (Media Convergence Nodes) assets. RCom will pay additional Rs 10,000 crore of its debt, out of the proceeds of sales and commercial development of DAKC and other prime real estate assets across 8-metros.