DoT sets 3-year lock-in period for telecom equity
24 Jul 2009
The department of telecommunication (DoT) has finalised a three-year equity lock-in period for telecom service providers under the unified access services (UAS) licence.
Accordingly, investors holding 10 per cent or more equity stake in a UAS licensee company on the effective date of issue of UAS licence and whose net-worth has been taken into consideration for determining the eligibility for grant of UAS licence, will have to hold on to the equity capital till the completion of three years.
The effective date of UAS licence will be decided on the date of issue of licence or the date of fulfillment of all the rollout obligations under clause 34, whichever is earlier, a government release said..
UAS licensees are allowed to issue additional equity share capital by way of private placement/public issues. However, investors coming under the lock-in condition are not allowed to transfer any shares by way of sale, assignment etc to any other person during the lock-in period, the release said.
The invested amount in the shareholding by the equity holder shall not be reduced in any circumstances during the lock-in period.
In case of issue of fresh equity within the lock-in period, the declaration of dividend and/or special dividend shall be barred.
The lock-in conditions do not apply in the case of enforcement of pledge by the lending financial institutions/ bank in the event of defaults committed by the UAS licensee company, the release added.
