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| Russia okays $600 mn investment in SSTL for 20% stake |
| Press Trust of India / New Delhi Sep 08, 2010, 21:19 IST |
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The Russian government will pick up about 20 per cent stake for $600 million (Rs 2,793 crore) in Sistema Shyam Teleservices (SSTL), a joint venture telecom firm with India's Shyam Group.
Russian Federation has approved an equity investment in SSTL, Sistema's subsidiary in India, which provides telecom services under MTS brand, SSTL said in a statement.
When contacted, SSTL spokesperson said Russian government would own about 20 per cent in SSTL after the equity investment.
SSTL is a joint venture between Russia's Sistema and India's Shyam Group. Sistema has a 73.71 per cent stake in the joint venture, while Shyam Group holds 23.79 per cent in the company and the remaining 2.5 per cent is held by the public.
Last year, the Russian government said it would buy 20 per cent in SSTL for over Rs 3,000 crore through funds available under the rupee-rouble debt agreement.
This agreement allows the debt reserves of $2 billion, which India owes to the Russian Federation, to be used by the Russian government or companies for investments in India.
SSTL said that the funds would be used for the expansion of MTS's services in India.
"SSTL plans to use the funds to be received to finance development of the company's activities, the expansion of its branded retail network and launch of operations in a number of new circles," it added.
The company has 12 operational circles and expects to start services across the remaining circles by next year. It plans to launch services in UP (east), UP (west) and Gujarat by the end of this calendar year.
Meanwhile, SSTL today said its IPO is "not far away" but it has "not frozen any date for it as yet."
"We have not frozen any date for our IPO but it is not far away," SSTL's Chief Sales Officer Atul Joshi told reporters here.
SSTL was mulling an initial public offer (IPO), but the plan was on hold until the Russian government made its scheduled investment as the shareholding pattern needs to be finalised before an IPO.
It is expected that the Russian government, represented by the Federal Agency for State Property Management (Rosimushchestvo), will participate in an issuance of additional shares of SSTL, paying an equivalent of $600 million in the form of Indian rupees.
The issuance of shares to the Russian government is subject to the receipt of necessary regulatory and corporate approvals, including the approval by the General Meeting of shareholders of SSTL, and the signing of binding agreements.
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