Bombay HC admits R-Com's SSTL acquisition plea

The Bombay High Court has convened a meeting of Reliance Communications (R-Com) shareholders on Tuesday (8 March 2016) in connection with an application for merger of the Anil Ambani-led R-Com and the Indian arm of Russian telecom firm Sistema JSFC.

The HC direction comes on an application moved by Reliance Communications Ltd on Monday for the so-called scheme of arrangement for the acquisition of Sistema Shyam Teleservices Ltd (SSTL).

''The Bombay high court has admitted the application for Scheme of Arrangement between R-Com and SSTL. The Bombay high court has directed R-Com to convene a court-convened meeting of R-Com's shareholders on Tuesday, 8 March 2016,'' the company said in a statement on Monday.

R N Bhardwaj, director, R-Com, has been appointed chairman of the proposed meeting.

''R-Com is, therefore, finalising a notice of the above meeting to be sent to its shareholders and taking necessary action in the matter,'' the company added.

R-Com, the country's fourth-largest mobile phone service company, last month received a so-called observation letter from BSE Ltd and National Stock Exchange of India Ltd on the ''scheme of arrangement''.

With the court-convened meeting of shareholders, R-Com has inched closer to the formal acquisition of SSTL.

R-Com on 2 November 2015 signed a definitive agreement to acquire SSTL in a transaction under which shareholders of Systema Shyam would acquire a 10-per cent stake, worth Rs2,082 crore, in R-Com.

The R-Com deal values SSTL at Rs4,500 crore, including payments to the government for spectrum allotted to Sistema.

The transaction is expected to be closed in the second quarter of 2016, subject to regulatory approvals.

The transaction potentially marks the start of a long-awaited consolidation in the world's fastest growing telecom industry, in which a dozen mobile services carriers are competing for market share.