6.11.15
2.11.15
RCom - Sistema merger
Anil Ambani-owned Reliance Communications (RCom) is merging the telecom business of Sistema Shyam Teleservices (SSTL) in a cashless deal worth Rs.4,500-5000 crore that will lead to the first major consolidation in the intensely competitive sector since 2009. “SSTL will get around 10% stake in the combined entity , but no board seat and no veto powers,“ a person directly involved in the deal said.
The deal will give India's fourth-largest carrier access to airwaves in the 850 MHz band which can be used for 4G services that it plans to start by end of the year.Moreover, it will be able to extend the validity of its licences by 12 years in eight high-revenue-generating circles like Delhi, Gujarat, Karnataka and Tamil Nadu.On the other hand, holders in SSTL, which has been struggling to grow its CDMA-based telecom business, will get to be a part of a stronger company.
Three people familiar with the matter said that every shareholder of SSTL, the Indian unit of Russian conglomerate Sistema JSFC, will get one share of RCom for 11.5 shares of theirs.
RCom is valued at nearly Rs.19,000 crore. Besides the stock, RCom won't take on any loans from the pure-play CDMA carrier's books, a relief to investors worried about the company's debt which stood at Rs.38,595 crore at the end of June.
Excluding interest, SSTL, which operates in India under the MTS brand, owes around Rs.2,500 crore to the DoT which RCom is taking on its books.
The promoter group holding in RCom will come down to around 54% from nearly 60% currently .
The person added that Sistema JSFC may infuse more funds to raise its stake in the new entity at a later stage, but “nothing concrete has been decided on this issue“.
Sistema JSFC, which entered India in 2007, holds nearly 57% in SSTL. Other shareholders include the Russian government with more than 17% and Shyam Group holding 24%. Minority shareholders own the rest. Once the deal closes, it will be the first major consolidation in the sector since Telenor bought into Unitech Wireless in 2009.
“The MTS brand will cease to exist, while there is a non-compete clause with Sistema,“ the person said, adding that details on taking over MTS's employees is still being worked out, and is likely to be finalised around March.
SSTL offers services in nine of India's 22 service areas to around nine million subscribers. RCOM is a pan-India operator offering both CDMA and GSM services and has around 110 million users. “MTS brings in about Rs.1,500 crore of (annual) top line and around 10,000 sites, besides IT infrastructure,“ the person cited above said.
Analysts said buying MTS, which possesses airwaves in Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, UP (West), Kolkata, West Bengal and Rajasthan, may work well for RCom given the latter's focus on 4G LTE. MTS had bought spectrum in eight of those circles, excluding Rajasthan, in an auction in 2013, which means RCom wouldn't need to pay anything more to the government, going by the current M&A rules.
BrahMos successfully tested from INS Kochi
The Navy successfully test-fired the BrahMos supersonic cruise missile from its newly-commissioned stealth destroyer INS Kochi, the largest-ever warship built in India, in the Arabian Sea on Sunday morning.
The 290-km deadly conventional missile hit its target, a decommissioned ship called Alleppey , with almost pinpoint accuracy during this first-ever vertical launch from the 7,500 tonne INS Kochi. The target ship, which was stationed 220 km away , sank after being destroyed by the air-breathing, fire-and-forget missile.
Ten Indian frontline warships have already been equipped with BrahMos missiles, which fly at almost three times the speed of sound at Mach 2.8, that are jointly produced by India and Russia.
“The Kolkata-class destroyers have the universal vertical-launch BrahMos systems, which add to the overall stealthy nature of the warships since they are positioned below the deck. Each warship carries 16 missiles in two eight-cell launch systems,“ said an official.
From 2007 onwards, the Army has also progressively inducted two regiments of BrahMos Block-I and II missiles, which have been developed to hit a specific small target with a low radar cross-section in a cluttered environment.
The 290-km deadly conventional missile hit its target, a decommissioned ship called Alleppey , with almost pinpoint accuracy during this first-ever vertical launch from the 7,500 tonne INS Kochi. The target ship, which was stationed 220 km away , sank after being destroyed by the air-breathing, fire-and-forget missile.
Ten Indian frontline warships have already been equipped with BrahMos missiles, which fly at almost three times the speed of sound at Mach 2.8, that are jointly produced by India and Russia.
“The Kolkata-class destroyers have the universal vertical-launch BrahMos systems, which add to the overall stealthy nature of the warships since they are positioned below the deck. Each warship carries 16 missiles in two eight-cell launch systems,“ said an official.
From 2007 onwards, the Army has also progressively inducted two regiments of BrahMos Block-I and II missiles, which have been developed to hit a specific small target with a low radar cross-section in a cluttered environment.
`Brand India'
India has moved up one rank to become the world's seventh most valued `nation brand', with an increase of 32% in its brand value to $2.1 billion. The US remains on top with a valuation of $19.7 billion, followed by China and Germany at the second and the third positions respectively, as per the annual report on the world's most valuable nation brands compiled by Brand Finance.
The UK is ranked 4th, Japan is ranked fifth and France is sixth on the list. While India and France have moved up one position each since last year, all the top five countries have retained their respective places.
However, the surge of 32% in India's `nation brand value' is the highest among all the top 20 countries on the list. The nation brand valuation is based on five year forecasts of sales of all brands in each nation and follows a complex process. The gross domestic product (GDP) is used as a proxy for total revenues.
The report also said that India's `Incredible India' slogan has worked well, while Germany suffered due to the Volkswagen crisis. About the US, the report said it remains a powerful brand with an inviting business climate. “However its value comes in large part from the country's sheer economic scale...The US' world-leading higher education system and the soft power arising from its dominance of the music and entertainment industries are significant contributors too. “This soft power will help the US to retain the most valuable nation brand for some time after China's seemingly imminent rise to become the world's biggest economy ,“ it added.
The study further said that China's recent stock market turbulence and slowing growth will also extend the US' tenure of the top spot.
Among Brics nations, India is the only country to have witnessed an increase in its brand value with all others -Brazil, Russia, China and South Africa -seeing a dip in their respective brand valuations. India is the second most valued among these emerging economies after China, followed by Brazil, Russia and South Africa.
The UK is ranked 4th, Japan is ranked fifth and France is sixth on the list. While India and France have moved up one position each since last year, all the top five countries have retained their respective places.
However, the surge of 32% in India's `nation brand value' is the highest among all the top 20 countries on the list. The nation brand valuation is based on five year forecasts of sales of all brands in each nation and follows a complex process. The gross domestic product (GDP) is used as a proxy for total revenues.
The report also said that India's `Incredible India' slogan has worked well, while Germany suffered due to the Volkswagen crisis. About the US, the report said it remains a powerful brand with an inviting business climate. “However its value comes in large part from the country's sheer economic scale...The US' world-leading higher education system and the soft power arising from its dominance of the music and entertainment industries are significant contributors too. “This soft power will help the US to retain the most valuable nation brand for some time after China's seemingly imminent rise to become the world's biggest economy ,“ it added.
The study further said that China's recent stock market turbulence and slowing growth will also extend the US' tenure of the top spot.
Among Brics nations, India is the only country to have witnessed an increase in its brand value with all others -Brazil, Russia, China and South Africa -seeing a dip in their respective brand valuations. India is the second most valued among these emerging economies after China, followed by Brazil, Russia and South Africa.
Subscribe to:
Posts (Atom)
