New telecom players cannot sell stake for three years

Friday, 24 July 2009, 01:52 Hrs
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New Delhi: The government Thursday said new entrants in the telecom sector cannot sell the promoters' equity within three years of getting the licence.

"There shall be a lock-in period for sale of equity of a person whose share capital is 10 percent or more in the UAS (unified access service) licensee company," the Department of Telecom (DoT) said in a statement.

The restriction would come into effect from the date the licence has been granted and be in place till completion of three years or till the fulfilment of all the roll-out obligations, it said.

DoT added that the invested amount in shareholding by the equity holder "shall not be reduced in any circumstances during the lock-in period".

Additional equity shares can, however, be issued by these companies through way of private placements or public issues, provided they do not pay out dividend, the statement said.

However, the lock-in will not be applicable in cases where a financial institution or bank sells shares pledged with it by a telecom operator as collateral in case of a default.
Source: IANS
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