The Russian government will acquire a 19.8 per cent stake in Sistema-Shyam Teleservices Ltd for $676 million (around Rs 3,150 crore).
Sistema-Shyam is a joint venture between Russia’s Sistema and India’s Shyam group.
New shares will be issued for the stake sale. Subsequently, Sistema’s stake in the joint venture will come down to 54.2 per cent, while the Shyam group will continue to hold 23.5 per cent equity.
The approval to the fresh equity issue was given at an extraordinary general meeting of the company here.
The proposal to sell shares to the Russian Federation was recently cleared by the Foreign Investment Promotion Board under the ministry of finance.
“The new shareholding pattern will improve the financial stability of Sistema-Shyam Teleservices Ltd (SSTL) and increase its share value. The funds will be used for expanding SSTL’s business in circles of its current operation, as well as for network deployment in new regions,” CEO Vsevolod Rozanov said in a statement.
Sistema-Shyam has the licence and spectrum to provide mobile services in all the 22 circles across the country and has over 2.8 million subscribers. The company has also issued fresh shares to the Indian partner so that it does not exceed the 74 per cent foreign investment limit on telecom firms.
The finance ministry had earlier opposed the sale as it believed the promoters would offload their own stake, which was against the rules. On clarification from the owners that new shares would be issued, the ministry gave the approval. Telecom rules bar owners from selling stakes for three years but do allow them to issue new shares.
Source: Telegraph India