Sterlite Technologies today announced demerger of its power business into Sterlite Power Transmission to become a pure-play telecom firm.
"The demerger scheme was earlier approved by the High Court of Mumbai on April 22, 2016, post approval by all relevant stakeholders of Sterlite Tech on December 15, 2015," Sterlite Technologies said in a BSE filing.
"The demerger of power transmission business is a strategic decision that provides a well-deserved value-building opportunity for the telecom business."
Sterlite Tech also announced completion of Elitecore Technologies' merger, which is a global provider of Operation Support Service (OSS) and Business Support Service (BSS) solution.
Sterlite Tech had acquired Elitecore Technologies in 2015.
The merger of Elitecore into Sterlite Tech will allow for seamless integration of two companies leading to stronger customer offerings as one telecom entity.
Sterlite Technologies Whole-Time Director and V-C Pravin Agarwal said: "The last few years have seen Sterlite Tech grow rapidly, and we have developed breakthrough innovations with over 100 patents... The demerger gives us a unique and compelling business model to respond to a dynamic market scenario, and create maximum value for our stakeholders."
The demerger would allow "the company to aggressively pitch for the opportunities of a rapidly changing broadband market, reignite its innovation pipeline, strengthen its go-to-market strategy and unlock greater value for shareholders".
Sterlite Tech had acquired Elitecore Technologies
in 2015. The merger of Elitecore into Sterlite Tech will allow for seamless integration of two companies leading to stronger customer offerings as one-telecom entity.
Sterlite Tech has been in transformation phase for the last few years from a manufacturing play to a specialty business model, straddling the entire telecom value chain by significantly adding its presence into solutions, software and services. This evolution of business model will substantially increase the company's addressable market size and drive improved ROCEs.
Ratifying this transformation, Sterlite Tech has implemented a new brand identity and a logo. The new avatar of Sterlite Tech is world's leading and India's only vertically integrated optical communication products, services and software company. It aims to transform everyday living by delivering smarter networks. Over the past few years, Sterlite Tech has been closely involved in India's nation building efforts, working with governments and private operators to build best-in-class broadband infrastructure.
As India quickly moves to its vision of technological evolution, Sterlite Tech's smart networks will accelerate ICT performance and drive sustained growth in the coming decade. The company has successfully executed and strengthened its core business with well-timed organic and inorganic moves.
