RCom, Sistema in talks to merge telecom biz in India
Tribune News Service
New Delhi, June 15
Reliance Communications (RCom) and AFK Sistema have entered into exclusive discussions on a potential merger between the Indian telecom business of Sistema Shyam TeleServices (SSTL) and Reliance Communications through non-cash, stock swap arrangement.
The deal, if it goes through, could bring in additional annual revenue of around Rs 2,000 crore for the Anil Ambani-led telecom company.
Under the deal, RCom will merge MTS’ India operations into itself and SSTL will pick up a stake in RCom in return. The contours of the deal are still being worked upon.
SSTL is pushing to have about 10% stake in the resultant entity while RCom wants to settle it at around 7-8%.
The discussions are indicative and non-binding in nature and remain subject to due diligence, definitive documentation and approvals, as may be necessary. There is no certainty that any transaction will result, RCom said.
Reliance Communications is the flagship company of the Reliance ADAG Group, which has a customer base of over 118 million.
SSTL is a venture of Sistema Joint Stock Financial Corporation of Russia, the Russian Federation and the Shyam Group of India.
