The Russian government has reaffirmed its intention to invest US$600m in Sistema Shyam Teleservices (SSTL), despite uncertainties regarding the company’s licences in India, reported Dow Jones citing a local report.
SSTL is the telecom JV between Russian…
The Russian government has reaffirmed its intention to invest US$600m in Sistema Shyam Teleservices (SSTL), despite uncertainties regarding the company’s licences in India, reported Dow Jones citing a local report.
SSTL is the telecom JV between Russian operator Sistema and Indian conglomerate Shyam Group.
In November, the Indian regulator proposed cancelling the 2G licences of several new entrants, after months of controversy around the allocation of underpriced 2G spectrum in 2008 and allegations of favouritism that claimed the head of former telecom minister A. Raja.
In a recent announcement, the regulator recommended cancelling as many as 38 licences, including ten held by SSTL. It is not yet known whether the Indian government will follow these recommendations but some experts in the industry argue that we may well see such penalties being imposed on regulators.
In a separate report, SSTL president Vsevolod said, in November, that the company would be listed in early 2011.
Before that, the Russian government will invest as much as US$600m in SSTL, in return for a 20% stake in the company as part of a scheme aimed at settling India’s US$1bn outstanding debt with the former Soviet Union by financing investments in India.
SSTL needed a decision on the investment before it could submit an IPO proposal, as it required accurate information about its shareholding structure.
Sistema has a 73.71% stake in Sistema Shyam, while Shyam Group holds 23.79%. The remainder is held by minority shareholders.
