Sistema PJSFC, a publicly traded diversified Russian holding company, announces that it has completed the merger of its Indian telecommunications business with Reliance Communications Ltd (RCom), one of India’s leading telecommunications operators.
The merger has been approved by all relevant Indian regulators and courts.
As part of the transaction the telecommunications business of Sistema’s subsidiary, Sistema Shyam TeleServices (SSTL), including its licenses and obligations with respect to the 800-850 MHz frequency range, has been transferred to RCom.
SSTL now owns a 10% equity stake in RCom following a new share issue of the Indian operator.
If the Department of Telecommunications (DoT) and the courts of India confirm that SSTL’s spectrum can be used for deployment of the 4th generation networks without any additional payments, SSTL may become entitled to an earn-out payment from RCom.
In accordance with the approved transaction structure, SSTL’s minority shareholders will have the right to convert SSTL shares into RCom shares in proportion to their equity stakes in SSTL as part of a tender offer to be announced by the end of January 2018.
Sistema President Mikhail Shamolin said, “We welcome the completion of this deal, which marks another chapter in consolidation of the Indian telecom sector. As a shareholder of RCom we are confident that this merger will help strengthen the operator’s position in the industry and deliver on its strategic plans.”