New Delhi: Sistema Shyam Teleservices (SSTL), which offers mobile services in India under the brand name MTS, on Monday said it expects the Russian government to infuse funds in the company by October this year.
“The documents are with the Prime Minister’s office. We expect a decision to come in later this month or beginning of October. The investment will be about USD 620 million,” SSTL chief executive officer Vsevolod Rozanov told reporters here.
SSTL is a joint venture between Russia’s Sistema and India’s Shyam Group. Sistema has a 73.71% stake in the joint venture, while Shyam Group holds a 23.79% stake in the company and the remaining 2.5% is held by the public.
The Russian government is to buy a stake of about 20% in the company. The amount has now come down to $620 million on account of the change in valuations.
The funds for the acquisition were earmarked in the 2009 budget, but the process got delayed. The funds would be used for the expansion of MTS’s services in India.
“We will launch services in UP (east), UP (west) and Gujarat by the end of this calender year,” Rozanov said.
SSTL is also mulling an initial public offer (IPO), but the plan is on hold until the Russian government makes its scheduled investment.
“For regulatory purposes, the capital structure should be frozen before the IPO. As soon as the capital structure is fixed after the Russian government’s investment, a decision will be taken on IPO by end of this calender year or early next year,” Rozanov said.
The company has 12 operational circles and expects to start services across the remaining circles by next year.