Sistema Shyam TeleServices Ltd, a unit of Russia's oil-to-telecoms group Sistema JSFC, said on Thursday it has approved a new share issue that could raise nearly Rs3,500 crore.
It has agreed to sell 662.7 million shares, a nearly 20-per cent stake, to the Russian Federal Property Agency at Rs49.31 each for $676.9 million as part of India's debt settlement scheme. It will also offer 228.55 million shares to its Indian promoters at par, or Rs10 a share. This will give company much-needed funds to expand operations in India's mobile telephony market.
Sistema currently owns 73.71 per cent in the unlisted of Sistema Shyam, while India's Shyam Group holds 23.79 per cent. The remainder is held by minority shareholders.
A person close to Sistema described the Russian government's acquisition of Sistema Shyam shares as a "financing arrangement," saying Sistema will pledge to buy back the government's SSTL shares in five years' time, reports Dow Jones Newswires.
The deal will reduce the holding of Sistema in the Indian company to about 54 per cent. The allotment of shares to the Indian founders will, however, help Sistema Shyam keep the total foreign stake in it below the government-mandated limit of 74% for telecom firms.
Sistema Shyam currently provides mobile services on the code division multiple access, or CDMA, platform in eight of India's 22 telecom circles, and had 2.30 million users at the end of October.