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MUMBAI: Merger talks between Tata Teleservices and Russia's Sistema have advanced substantially, with negotiations centered on a deal that transfers NTTDoCoMo's stake as well as part of the Tata Group's holding to Sistema, giving it a substantial shareholding, said two people familiar with negotiations.
The two companies have appointed bankers - Rothschild for Sistema, which operates under the MTS brand, and Standard Chartered Bank for the Tata Group - said one of the two people.
However, the transaction will be held up till a new merger and acquisition policy is announced for the telecom sector. A senior official in the department of telecommunications, asking not to be named, said the policy is likely to be announced in three months.
Current M&A norms are not conducive for the deal as they may require MTS to either surrender or pay the market price to retain the airwaves held by Tata Tele.
In an emailed response, MTS said, "The immediate focus of the company is to efficiently run its 9 circle operations and turn OIBDA (operating earnings before depreciation and amortisation) positive by end of 2014."
A questionnaire sent to the Tata Group went unanswered. The two people quoted earlier said the Tata Group plans to reduce exposure to the telecom sector to a minority stake. As a result of the deal that is in the works, MTS would take a majority stake in the company.
Valuations had not yet been decided, the people said.
Merger talks between Tata Teleservices and MTS in advanced stage; NTT DoCoMo looking to exit - Economic Times
The two companies have appointed bankers - Rothschild for Sistema, which operates under the MTS brand, and Standard Chartered Bank for the Tata Group - said one of the two people.
However, the transaction will be held up till a new merger and acquisition policy is announced for the telecom sector. A senior official in the department of telecommunications, asking not to be named, said the policy is likely to be announced in three months.
Current M&A norms are not conducive for the deal as they may require MTS to either surrender or pay the market price to retain the airwaves held by Tata Tele.
In an emailed response, MTS said, "The immediate focus of the company is to efficiently run its 9 circle operations and turn OIBDA (operating earnings before depreciation and amortisation) positive by end of 2014."
A questionnaire sent to the Tata Group went unanswered. The two people quoted earlier said the Tata Group plans to reduce exposure to the telecom sector to a minority stake. As a result of the deal that is in the works, MTS would take a majority stake in the company.
Valuations had not yet been decided, the people said.
Merger talks between Tata Teleservices and MTS in advanced stage; NTT DoCoMo looking to exit - Economic Times
