New Delhi: The Russian government on Tuesday paid $600 million (about Rs2,714 crore) to acquire about 17% stake in Sistema Shyam Teleservices Ltd (SSTL), a joint venture between Russian giant Sistema and India’s Shyam group.
“As a part of previously announced transaction the Russian government completed the payment for shares of SSTL,” the CDMA services provider said in a statement.
Sistema, leading public diversified corporation in Russia and the CIS region, has a 74% stake in the joint venture with the Shyam Group. Shyam Group holds 23.5% stake and the rest 2.5% being public partake.
The Russian government will acquire the stake from Sistema, which will issue fresh shares.
SSTL is among a number of companies who have received government notice for failing to meet network roll-out obligations.
SSTL plans to use the funds to finance expansion and to strengthen its leading position in wireless broadband.
It will also use the funds to expand the branded retail network and to accelerate the launch of operations in a number of new circles.
Following the additional share issue, the total stake in the share capital of SSTL owned by Russian parties (Sistema and Rosimushchestvo) will not exceed 74%.
SSTL is expected to issue shares to the Russian government during the first quarter of 2011, subject to the successful completion of a rights issue to SSTL’s Indian shareholders and compliance with all applicable Indian regulatory requirements.
SSTL has over 8 million subscribers. It operates in 13 telecom circles of Kolkata, West Bengal & Sikkim, Rajasthan, Chennai and Tamil Nadu, Kerala, Bihar and Jharkhand, Mumbai, Maharashtra and Goa, Delhi and NCR, Haryana, Karnataka, Andhra Pradesh and Gujarat.
The company provides mobile broadband services under the MBlaze brand to more than 400,000 customers in 96 cities in India.