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Mobile operator’s proposed acquisition receives approval from country’s stock exchanges.
Reliance Communications this week applied to India’s high courts for permission to proceed with its acquisition of rival mobile operator Sistema Shyam Teleservices (SSTL).
The application was submitted after the RCom/Sistema deal was given the nod by both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
"The company (RCom) and SSTL are proceeding to file the necessary application with the Bombay High Court and Rajasthan High Court respectively for the approval of the scheme," said Reliance Communications, in a letter filed with both the BSE and NSE on Thursday.
RCom agreed to acquire SSTL in November. Under the terms of the deal, SSTL’ parent, 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).
Across the nine circles in which it operates, SSTL had 8.36 million customers at the end of September, according to the latest figures from the Telecom Regulatory Authority of India (TRAI). By comparison, RCom is India’s fourth-largest mobile operator with 110.39 million customers nationwide.
However, that could change if the company manages to reach a takeover deal with another of the country’s mobile operators.
RCom in December entered exclusive talks with India’s fifth-largest player Aircel about a potential merger. If a deal is struck, the combined company would have customer base of 194.39 million, which would propel RCom to the number two spot, behind Bharti Airtel but ahead of Vodafone.
