DoT clears Russian government's plan for 20 per cent in Shyam Sistema
23 November 2009
The Department of Telecom has cleared the Russian government's plan to invest a little over $676 million (Rs3,200 crore) for a 20 per cent stake in telecom service provider Sistema-Shyam Telecom Ltd.
"SSTL is permitted to bring in foreign equity by issue of fresh shares as per the lock-in principles of the DoT," the department told the Foreign Investment Promotion Board (FIPB) where the proposal has been pending.
SSTL has sought approval for FDI up to 20 per cent by the Federal Agency for State Property of Russian Federation into the company by subscription of up to 662.7 million of fresh equity shares of nominal value of Rs10 a share at the rate of Rs49.31 per share for an investment of around $676 million.
The Indian promoters will also infuse additional equity to keep 26 per cent Indian shareholding.
Post-transfer of the equity to the Russian government, Sistema's holding in the JV will go down to about 54 per cent. Sistema will still have a majority stake and enjoy management control of the company.
SSTL, currently operating in six circles, is in need of huge funds for a pan-India expansion.