The Russian Government on Wednesday approved equity investment worth $600 million (about Rs.2,700 crore) in Sistema Shyam TeleServices Ltd. (SSTL), in which Sistema, the diversified public financial corporation in Russia and the CIS, holds majority stake. SSTL, a joint venture between Sistema and India's Shyam Group with the former holding 73.71 per cent stake, provides telecommunications services under the MTS brand.
"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 held in accounts representing Indian governmental debt to the Russian Federation," said a company statement. 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, it added. Through the investment, Sistema will pick up around 20 per cent stake in SSTL.
SSTL plans to use the funds to finance its expansion and development in the Indian market, particularly in the area of wireless broadband Internet coverage. MTS, which is at present in 12 out of 22 telecom circles, has a subscriber base of over 60-lakh. SSTL is also planning to come out with its initial public offering soon.
