The Russian Government will acquire 19.8 per cent stake in Sistema Shyam Teleservices Ltd. (SSTL), a joint venture between Russia’s Sistema and India’s Shyam Group, for $676 million (around Rs.3,150 crore).

An extraordinary general meeting of SSTL held here on Thursday approved the allotment of over 66.27 crore shares on a preferential basis to Russian Federal Agency for State Property Management of the Russian Federation (Rosimushchestvo) at Rs.49.31 per share. It also approved the allotment of up to 22.85 crore equity shares of Rs.10 each to SSTL’s existing Indian promoters. SSTL provides mobile services under the brand name MTS.

After this, Sistema’s stake in the joint venture would come down to 54.2 per cent, while the Shyam Group would continue to have 23.5 per cent equity. The proposal to sell shares to the Russian Federation was recently cleared by the Foreign Investment Promotion Board (FIPB) under the Ministry of Finance. At present, SSTL share capital consists of about 250-crore shares and after the fresh issue it will be about 335-crore shares.

“The new share holding pattern will improve the financial stability of SSTL and will increase its share value. The funds will be used for further development of SSTL business in telecom circles of its current operation, as well as for network deployment in new regions not covered by SSTL activities so far,” SSTL CEO Vsevolod Rozanov said in a statement.

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