‘Lock-in’ period for sale of promoters equity for UAS Licence

Department of Telecommunication has decided that there shall be following conditions for sale of equity of Unified Access Services (UAS) licensee company. The issue relating to ‘lock-up’ period for sale of promoter’s equity for UAS Licence was under consideration in the Department and the recommendations of TRAI were also sought on 24.11.2008 which was received on 12th March, 2009

1. There shall be a Lock-in-period for sale of equity of a person whose share capital is 10% or more in the UAS licensee company on the effective date of UAS licence and whose net-worth has been taken into consideration for determining the eligibility for grant of UAS license, till completion of three years from the effective date of the UAS licence or till fulfillment of all the rollout obligations under clause 34, whichever is earlier.

2. Issue of additional equity share capital by the UAS licensee company by way of private placement/ public issues is permitted. However, such a person ( on whom the Lock-in condition applies as per para (1) above) shall not transfer in any manner such as sale, assignment etc., his share capital directly or indirectly to any other person during lock-in period i.e. the invested amount in the shareholding by the equity holder shall not be reduced in any circumstances during the lock-in period.

3. In case of issue of fresh equity, within the lock-in period the declaration of dividend and/ or special dividend shall be barred.

4. The provision of lock-in period shall not apply, in pursuance to enforcement of pledge by the lending financial institutions/ bank in the event of defaults committed by the UAS licensee company.