The Russian Federation has allocated over $670 million in this year’s budget to pick up around 20 per cent stake in Sistema Shyam Teleservices Ltd, according to the company President and Chief Executive Officer, Mr Vsevolod Rozanov.
The majority stakeholder (74 per cent) in the joint venture, Sistema of Russia, would offload a part of its stake to the Russian Government while the Indian partner, Shyam Group, would retain its 23.5 per cent share in the company, Mr Rozanov said here on Thursday on the sidelines of the launch of its CDMA telecom service under the MTS brand. The balance 2.5 per cent share in the company is with the public. Russia would infuse the equity by December through an agency governing federal assets, he added.
“The stake Sistema may offload would depend upon the independent valuation of the joint venture expected soon,” he said, pointing out that the Russian company would continue to hold a majority share (more than 51 per cent) in the joint venture.
Stake dilution
Sistema is in final stages of discussions with the Russian Federation on the technicality of the stake dilution process.
The proposal would be placed with the Foreign Investment Promotion Board soon after the final clearance is received from the Russian Government, Mr Rozanov said.
Sistema plans to invest $5.5 billion in the telecom venture over the next five years, of which $1.2 billion has already been pumped in, its Senior Vice-President, Mr Sergey Cheremin, said.
The amount would be invested at an equity-debt ratio of 40:60.
The company is also in the final stages of setting up a joint venture in India for manufacturing micro- electronic equipment such as SIM cards, RFID cards, billing systems, and telecom equipment, he said, adding that it was also looking at venturing into IT solutions, IT integration and security services.
Realty plan dropped
It has, however, dropped its plan of investing in real estate in the country due to the downturn, he added.
Mr Rozanov said the company plans to launch its telecom services in 11 circles by December.
It has launched operations in Rajasthan, Tamil Nadu, Kerala and plans to extend services to West Bengal, Bihar, Chhattisgarh, Delhi, Mumbai, Punjab and Haryana by the beginning of 2010.
It has set itself a target of covering 10 per cent of the total mobile subscribers in five years
Source: The Hindu Businessline