Mumbai, Nov 1 (DHNS): In a move that is likely to strengthen its position in the market, Anil Ambani-controlled Reliance Communications (RCom) will consider merger of Sistema Shyam Teleservices (SSTL) with itself on November 2.

“A meeting of the board of directors will be held on November 02, 2015, inter alia, to consider a scheme of arrangement for demerger of telecom business undertaking of Sistema Shyam Teleservices into the company,” RCom said in a release to the exchanges.

RCom had entered into talks for a potential merger with SSTL in June this year.

“RCom and AFK Sistema have entered into exclusive discussions on a potential merger between the Indian telecom business of SSTL and RCom through a stock swap,” RCOM had said in a communique to the exchanges on June 15.

The discussions are indicative and non-binding in nature, and remain subject to due diligence, definitive documentation and approvals, as may be necessary. There is no certainty that any transaction will result, RCom had added.

RCom has a customer base of over 118 million, including over 2.6 million individual overseas retail customers. The company’s corporate clientele includes over 39,000 Indian and multinational corporations including small and medium enterprises and over 290 global, regional and domestic carriers.

Hike in revenues

SSTL is a venture involving equity participation by Sistema Joint Stock Financial Corporation of Russia, the Russian Federation, and the Shyam Group of India. Sistema JSFC is the majority shareholder in the company and approximately 2.5 per cent equity stake is held by public.

SSTL had reported a 12 per cent increase in consolidated revenues for the second quarter ended June 30, 2015 at Rs 374.5 crore. Operating income before depreciation and amortisation (OIBDA) for the company during the quarter stood at Rs 54.1 crore.

The company operates in nine circles, including Delhi, Kolkata, West Bengal, Rajasthan, Karnataka and Tamil Nadu. As of March 31, 2015, it had 8.9 million subscribers.

Merger plans

Board of directors meeting to be held on Monday, November 2 RCOM has a customer base of over 118 million, including over 2.6 million individual overseas retail customers.

SSTL is a venture involving equity participation by Sistema Joint Stock Financial Corporation of Russia, the Russian Federation, and the Shyam Group of India.