News
Indian operators expected to close takeover deal in Q2 2016.
Reliance Communications’ shareholders have voted in favour of the company’s plans to acquire rival player Sistem Shyam Teleservices (SSTL).
The India’s telco’s stakeholders met to vote on the issue on Tuesday, as instructed by the Bombay High Court. They overwhelmingly approved the scheme of arrangement that covers the takeover, RCom revealed in a statement to the Bombay Stock Exchange.
Under the terms of the proposed deal, RCom will absorb SSTL, while its parent company, Russia’s Sistema, will take a 10% stake in RCom.
RCom will also assume SSTL’s spectrum licence fee obligations, which amount to payments of 3.92 billion rupees (€54 million) per year for the next 10 years to the Department of Telecommunications (DoT).
The companies have not disclosed the value of the transaction, but according to the Times of India, it is worth INR45 billion (€612 million).
The paper said SSTL shareholders are due to have their say later this month, with the deal expected to close in the second quarter of this year.
RCom is India’s fourth-largest mobile operator with 100.89 million customers and a market share of 9.98% at the end of 2015, according to the Telecom Regulatory Authority of India (TRAI).
SSTL, which operates under the MTS brand name in India, is much smaller, with operations in just nine telecoms circles.
It had just over 8 million mobile customers and a 0.79% market share at the same date.
