RCom to pay Rs 3,920 cr for spectrum licence post MTS merger

As result of demerger, SSTL will acquire and hold 10% equity stake in RCom

Reliance Communications, which signed a definitive agreement with Sistema Shyam Teleservices Limited (SSTL) today to acquire operation of MTS network in exchange for 10% stake, has agreed to pay Rs 392 crore per year till next 10 years for spectrum licence owned by the Russian operator.

Before closing the deals, SSTL would pay off all its liabilities, RCom said in a statement without giving definite time period to close the transaction.

"As result of the demerger, SSTL will acquire and hold a 10% equity stake in RCom. In addition, RCom will assume the liability to pay instalments for SSTL's spectrum, amounting to Rs 392 crore per annum for the next 10 years. Prior to Closing of the Transaction, SSTL intends to pay off its existing debt," the company said in a statement post its board of directors meeting today.

By end of March 2015, SSTL had a net debt of Rs 4,153 crore.