RCOM may not have to wait for next year to get Etisalat’s investment in the company. Industry sources said that Etisalat may buy up to 9.9% equity in the company in next few weeks. “Talks are in advanced stages,” said a source familiar with the developments.
Shahid Balwa, original promoter of Etisalat DB, however, said Eisalat has commitments with Etisalat DB and all its investments in India will be through Etisalat DB only.
Etisalat holds a 45 per cent stake in the company. Etisalat invested $900m in Etisalat D B. However, the company could not do much.
Licence conditions do not permit a promoter/company to own more than 10% equity in more than one operators in a telecom operator in India.
The lock-in-period clause does not permit a new licence holder to sell its equity in the company before three years of issuance of licence.
Hence Etisalat is considering buying up to 9.9% equity in the company.
Earlier, RCOM board had approved selling 26% equity to a strategic investor. Sources believe that Etisalat may offer $3bn (Rs 14,100 crore) for 26% equity.
RCOM is passing through serious financial crunch. It is in a major restructuring exercise and is hiving off all its subsidiaries. It has already merged its tower entity with GTL.