RCom buys Sistema's Indian operations

As part of the deal, Sistema will acquire 10% stake in Reliance Communications

Mumbai, Nov 2:

Marking the first major acquisition in recent times, Reliance Communications (RCom) has entered into an agreement to acquire Russian conglomerate Sistema JSFC’s Indian telecom business.

The acquisition will be by stock and takeover of SSTL’s spectrum in instalments of ₹392 crore a year for the next 10 years.

According to sources, this pegs the deal size at about ₹4,500 crore.

Under the agreement, Sistema Shyam Teleservices Ltd (SSTL), which provides telecom services under the MTS brand, will be merged with RCom. Following the acquisition, SSTL will get a 10 per cent stake in RCom. Promoter shareholding in RCom will come down to 54 per cent.

Significant synergies

“The combination of our wireless businesses, through the demerger of SSTL wireless business into RCom for stock consideration, will generate significant capex and opex synergies for mutual benefit,” said Gurdeep Singh, President and Chief Executive Officer, Consumer Business at RCom.

However, there will be no board seats or veto rights available to SSTL.

“Despite the numerous challenges the sector faced in recent years, the combination of two leading data service providers is a clear sign of progress for the Indian telecom industry,” said Mikhail Shamolin, President and CEO of Sistema.

On its part, SSTL intends to pay off its existing debt before the closing of the transaction.

The company has also agreed for a payment or an earn-out mechanism for the Department of Telecommunications (DoT) disputed spectrum contiguity charges.

Rationale of the deal

On completion of the acquisition, which is subject to certain conditions and regulatory approvals, RCom will get about nine million customers and ₹1,500 crore in annual revenue.

In addition, the company, controlled by billionaire Anil Ambani, will get superior 850 MHz band spectrum held by SSTL, which is suited for 4G LTE services.

Also, getting the spectrum eliminates future cash outgo for RCom in eight circles till 2021.

Further, it will also extend RCom’s spectrum validity in the band for another 12 years (from 2021 till 2033).

Shares in RCom ended up 6.18 per cent at ₹79.90 on the BSE, which closed 0.37 per cent down on Monday.

Sandip Ginodia , Director

ABHISHEK SECURITIES

We deal in over 60 unlisted companies with 15 years of experience .

For latest prices visit : www.abhisheksecurities.com/unlisted.htm / call : 09830271248 .

Email : ginodiasandip1@gmail.com

HDFC Life inks distribution tie-up with Catholic Syrian Bank

HDFC Life has entered into a bancassurance (the selling of life assurance and other insurance products and services by banking institutions) tie-up with Catholic Syrian Bank to distribute its individual life insurance products to the private lender’s customers. HDFC Life will offer its leading range of individual life insurance, health and pension products to the Catholic Syrian Bank’s 1.5 million customer base across all its branches over a period of time. Sandip Ginodia , Director A LTIUS INVESTECH PVT LTD | ABHISHEK SECURITIES We deal in over 60 unlisted companies with 15 years of experience . For latest prices visit : www.abhisheksecurities.com/unlisted.htm / call : 09830271248 . Email : ginodiasandip1@gmail.com

Stock broker SMC Global files for IPO

F inancial services company SMC Global Securities has filed draft red herring prospectus with SEBI for public issue of 1,58,67,380 equity shares of face value of Rs 2 each. The issue comprises a fresh issue of 79,33,690 equity shares by the company and an offer for sale of 79,33,690 shares by Millennium India Acquisition Company Inc. As of September 30, 2012, "We service our broking clients through a network of 43 branches and 2,521 registered sub-brokers and authorized persons spread in more than 500 cities and towns. We have also established an office in Dubai for brokerage and trading activities in that region," the company said. SMC has reported a loss of Rs 0.42 crore and total revenues of Rs 292.24 crore in the year ended March 31, 2012. "The proceeds of the fresh issue shall be utilised for margin maintenance with stock exchanges; part repayment of term loan; investments into subsidiary, SMC Comtrade; and general corporate purposes," according to p...

NBI Industrial Finance Limited

NBI Industrial Finance Limited , Strand Road, Kolkata-700001 NBI Industrial Finance Limited was originally incorporated in Lahore in 1935 as The New Bank of India Limited. Dr. Ganeshi Lal Aggarwal and Mr. Kohli were the original promoters. After 1947 the Registered office was shifted to New Delhi. To provide for the losses due to partition the face value of the share was reduced from Rs. 10 to Rs. 5 . Later, The New Bank of India Ltd. was nationalised. Most of the non promoter shareholders took cash compensation. The Registered Office of the Company was shifted from Connaught Place, New Delhi to Strand Road , Kolkata. The share's face value was consolidated to Rs. 10. Share Capital : Rs. 1 cr 12 lakh Reserves : Around Rs.11 cr NBI Industrial Finance Company is , now , the investment holding Company of Bangurs ( Benu Gopal Bangur of Shree Cement group ). They were the promoters of New Bank of India at the time of nationalisation. As the Company has holding of Shree Cement Ltd. it...

Abhishek Securities

Search This Blog