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Debt-ridden telecom firm Reliance Communications has allotted 10 per cent shares to Sistema Shyam Teleservices which merged with the company early this month.
RCom has allocated over 27.65 crore shares equivalent to 10 per cent equity capital of the company to Sistema Shyam Teleservices (SSTL) on November 9, as per a regulatory filing.
The value of shares allocated to Russian conglomerate Sistema owned SSTL is estimated to be around Rs 415 crore as per the trading price of RCom stock at BSE on November 9.
The completion of SSTL business merger provided a breather to RCom which will shut down its loss-making wireless telephony business by December 30 and concentrate only on 4G internet services.
As part of the deal, RCom has acquired the entire telecom business of SSTL including its licences which bring along 30 MHz of spectrum in 800 MHz and 850 MHz band, considered premium frequencies for providing 4G services.
SSTL merger has resulted in extension of RCom's spectrum validity in the 800 MHz and 850 MHz band in eight telecom service areas -- Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, UP-West and West Bengal -- by 12 years, from 2021 to 2033.
now has the liability to pay DoT instalments for SSTL's spectrum, amounting to Rs 390 crore per annum for the next 8 years.
With Rs 44,000 crore loan on its books, RCom is in the midst of a strategic debt restructuring, under which it has entered into a standstill agreement with banks requiring it not to pay any interest or principal till December 2018.
Shares of RCom closed at Rs 14.05, down by 6.33 per cent, on the BSE today.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)